India’s State Oil Firms Halt Russian Crude Amid Trump Tariff Warnings and Shrinking Discounts

In recent days, India’s major state‑owned oil refiners Indian Oil Corporation, Hindustan Petroleum, Bharat Petroleum, and Mangalore Refinery & Petrochemicals have temporarily suspended purchases of Russian crude. According to industry sources, the decision followed shrinking discount margins on Moscow’s crude and mounting pressure from U.S. President Donald Trump, who cautioned buyers that purchasing Russian oil could trigger punitive tariffs.

These state refiners, which operate the majority of the country’s 5.2 million barrels‑per‑day refining capacity, have turned to the global spot market for alternative supplies. They are now sourcing crude from the Middle East particularly Abu Dhabi’s Murban grade and from West African producers to meet domestic demand.

Meanwhile, private refiners such as Reliance Industries and Nayara Energy one of the latter being majority‑owned by Russia’s Rosneft continue to receive most of the Russian crude flowing into India. Private firms have accounted for roughly 60% of India’s Russian oil purchases in the first half of 2025.

India remains Russia’s largest oil export destination, with Russian crude comprising approximately 35% of India’s total oil imports. Despite that reliance, the combination of reduced discounts and looming tariff threats is reshaping procurement strategies.

On July 14, President Trump issued an executive warning of a potential 100% tariff on countries continuing to import Russian oil unless Moscow agrees to a peace deal in Ukraine. The appeal has reportedly influenced decision‑making within India’s state oil sector.

State media reports deny that the Indian government has formally instructed its oil firms to stop Russian purchases, instead emphasizing that market conditions and geopolitical considerations have driven the shift.