Yugcharan News / 22-09-2026
Indian oil refiners are considering reducing purchases of Russian crude for November delivery as a new United States sanctions law raises the possibility of punitive tariffs on countries continuing to buy Russian energy, according to people familiar with the discussions.
The development comes at a sensitive time for India’s energy market. The country is the world’s third-largest crude oil buyer and has relied heavily on Russian supplies in recent years, particularly as disruptions in the Middle East have complicated access to traditional sources of crude.
Indian refiners have purchased more than half of their crude imports from Russia in some recent months, benefiting from competitive prices and helping offset disruptions in supplies from the Middle East. However, major processors have recently begun examining alternative cargoes as uncertainty grows over the potential impact of Washington’s new measures.
US law raises tariff risk for Russian oil buyers
The latest uncertainty follows the passage and signing of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026.
The legislation gives US President Donald Trump authority to impose tariffs of up to 100% on countries that continue to purchase Russian oil and gas. India is among the major buyers that could potentially be affected by the measure.
The legislation does not mean that a 100% tariff has automatically been imposed on Indian goods. Rather, it provides the US administration with authority to impose such measures, leaving the timing and scope of any action subject to decisions by Washington.
The new law has therefore created additional uncertainty for Indian refiners as they begin planning their next purchasing cycle. The usual negotiations for November-loading Russian crude are expected to begin in the final week of September, putting purchasing decisions directly in the period of uncertainty over how Washington will implement the legislation.
Russian crude remains a major part of India's supply
Russia has become one of India's most important sources of crude oil since Western sanctions and restrictions were imposed following Russia's invasion of Ukraine.
Indian refiners have taken advantage of discounted Russian crude to manage import costs and maintain supplies. The strategy became particularly important as disruptions to Middle Eastern oil flows increased during the ongoing conflict in West Asia.
According to Kpler data cited in reports, India's Russian crude imports are expected to average about 1.9 million barrels per day in September. That would account for more than 35% of India's total crude imports and represent the lowest level since April.
Even at that reduced level, Russian oil remains a significant component of India's energy supply chain.
The prospect of cutting purchases therefore presents a difficult supply and pricing question for refiners. Replacing Russian crude with other grades would require additional cargoes from alternative producers at a time when international oil markets are already facing disruptions.
Replacing Russian supplies may prove costly
Indian refiners have options to diversify their crude purchases, but replacing Russian volumes entirely could be difficult.
Russian Urals crude delivered to India was priced at around $133 a barrel at the end of the previous week, according to Argus Media data cited in reports. Comparable Middle Eastern grades such as Oman and Murban were several dollars more expensive.
That price difference is significant for refiners processing millions of barrels of crude. A shift towards more expensive grades could increase refinery input costs and potentially put pressure on margins.
The challenge is compounded by the disruption in crude flows through the Persian Gulf and Strait of Hormuz. Gulf producers have faced difficulties restoring normal export flows, while the wider Middle East conflict has increased uncertainty over shipping routes and availability.
At the same time, India's domestic crude requirement is rising. A new refinery in Rajasthan and expansions at existing facilities are pushing the country's overall crude purchases towards a reported 5.4 million barrels per day.
Middle East disruptions complicate India's options
India's dependence on Russian crude has to be viewed against the wider disruption in global oil markets.
Oil shipments through the Strait of Hormuz have been affected during the continuing Middle East conflict. Saudi Arabia has also faced disruptions to its oil transportation infrastructure following attacks on its East-West pipeline.
Earlier reports indicated that the pipeline disruption affected more than 400,000 barrels per day of supplies destined for India, adding to uncertainty for state-owned refiners.
With several conventional suppliers facing logistical or geopolitical constraints, Indian refiners have fewer straightforward alternatives if Russian volumes are reduced substantially.
The situation means that any decision to reduce Russian purchases will have to balance the risk of US trade penalties against the cost and availability of replacement crude.
Refiners have previously adjusted purchases
Indian refiners have already altered Russian oil purchases in response to changing sanctions risks and international market conditions.
In recent months, New Delhi and Indian oil companies have faced pressure from Washington over purchases of Russian energy. The latest legislation has increased the stakes because it provides a legislative framework for potentially imposing tariffs on countries that continue buying Russian oil.
However, the scale of the adjustment remains uncertain.
A report published earlier in September said some Indian refiners planned to continue buying Russian crude despite the possibility of US tariffs, arguing that West Asian supply disruptions had narrowed the alternatives available to them. Refiners had also secured supplies for several weeks in advance.
The latest Bloomberg report indicates that the calculations may now be changing, with major processors beginning to examine alternative cargoes for November.
This does not necessarily mean that Indian refiners will stop buying Russian crude altogether. Instead, the discussions suggest that companies are assessing how much Russian oil they can continue purchasing while managing the possibility of additional US trade measures.
India watching US action on other buyers
Indian refiners and policymakers are also monitoring how Washington applies the new law to other major buyers of Russian energy, particularly China.
The legislation allows the US administration to impose tariffs within a specified period on countries that continue significant purchases of Russian energy. Potential tariffs can reach as high as 100%, depending on the measures adopted by Washington.
The treatment of other large Russian oil buyers could therefore influence India's calculations.
If Washington applies the measures broadly, Indian companies could face a different competitive environment from one in which the United States grants exemptions or takes a more selective approach.
India has also been examining the details and potential consequences of the legislation. Commerce and Industry Minister Piyush Goyal has said the government is studying the provisions and their implications.
Energy security remains a key consideration
For India, the issue extends beyond the commercial decisions of individual refiners.
The country imports more than 88% of the crude oil it consumes, making the availability and price of imported energy a major consideration for the economy. Russian crude has become an important part of that import basket, particularly because of its pricing and availability.
Any significant reduction in Russian supplies would therefore require refiners to source additional crude from other producers.
That could increase competition for available cargoes and potentially add pressure to international oil prices, particularly if other major buyers are simultaneously seeking alternative supplies.
The impact could extend beyond refiners to transportation, manufacturing and other sectors that depend on petroleum products. Changes in crude procurement costs can eventually affect fuel prices and broader inflationary pressures, although the extent of any impact would depend on global crude prices, refining margins, currency movements and the scale of any shift away from Russian supplies.
November buying cycle under scrutiny
The immediate focus for Indian refiners is the November delivery cycle.
As negotiations approach, companies are expected to assess the relative cost of Russian crude against supplies from the Middle East and other producing regions. They will also have to consider the possibility that US policy could change after purchases are made.
The result is an unusually uncertain environment for India's oil market.
Russian crude remains an important and, in many cases, competitively priced source of supply. At the same time, the potential cost of continued purchases has increased because of the US legislation.
India has previously maintained that its oil purchasing decisions are guided by energy security and the need to secure affordable supplies for its large population. The government has also continued to emphasise diversification of energy sources.
For now, the emerging strategy among Indian refiners appears to involve assessing alternatives rather than making an immediate and complete break with Russian crude.
The next few weeks will be important as refiners decide how much Russian oil to contract for November and whether alternative suppliers can provide sufficient volumes at competitive prices.
The decisions will take place against a backdrop of continuing Middle East supply disruptions, elevated geopolitical risks and uncertainty over the implementation of the new US tariff powers. For India, the central challenge will be balancing energy security and procurement costs with the potential trade consequences of continued purchases of Russian crude.
