Donald Trump tariff impact? Public sector refiners including Mangalore Refineries and Petrochemicals Ltd (MRPL), Bharat Petroleum Corporation, Indian Oil Corporation, and Hindustan Petroleum Corporation have stopped buying Russian crude oil from the spot market at a time when US has announced tariffs on India, sources told ET.US President Donald Trump has announced a 25% tariff rate on Indian exports. While announcing the tariff he had said that it will be effective August 1, 2025, but the executive order he has signed on Friday for several countries including India, says that the new tariffs will be applicable from August 7.Trump’s post on Truth Social earlier this week also said that India will face an additional penalty for its oil and arms trade with Russia. The quantum of this penalty has not yet been announced.
Some Indian Refiners Stop Russia Oil Buys
As the world’s third-largest oil-importing and consuming nation, India’s major refiners IOCL, BPCL, HPCL, and MRPL source approximately 40% of their crude oil needs through spot market purchases. These companies oversee 60% of India’s refining operations.
India’s Crude Oil Buys From Russia
“Refiners will shift to procuring crude from the Middle East as well as other countries as was the case earlier. Though this will be more expensive than Russian Urals and will impact the gross refining margins,” one of the sources told ET.However, Reliance Industries and Nayara Energy, which have long-term crude procurement agreements with Russia, are likely to maintain their purchases, sources told the financial daily. These companies have historically generated substantial profits by selling refined products to European markets.Also Read | ‘India has not been a great global actor’: Donald Trump administration fires fresh salvo after 25% tariff; says Russia oil ‘most certainly a point of irritation’
Government Denies Telling Oil Refiners To Stop Russia Oil Buys
According to a TOI report, the government has rejected claims about instructing refiners to halt Russian crude purchases, maintaining its stance despite US pressure. Russia remains the main crude oil supplier for Indian refineries.Russian oil has become the preferred choice for Indian refiners, particularly private companies, due to substantial price advantages following the Ukraine conflict. As European nations and various American regions stopped direct Russian oil imports, Indian refineries utilised this crude both for domestic consumption and substantial exports to international markets.International media outlets had claimed on Thursday that the government was pressuring them to diversify their oil imports away from Russian sources. However, a high-ranking government official refuted these claims, saying that no directives had been issued regarding oil procurement, the TOI report said.Also Read | Donald Trump’s 25% tariff, ‘dead economy’ jibe: India sends clear message to the US in 5 points – what Piyush Goyal saidOn July 17, oil minister Hardeep Singh Puri had cautioned that removing Russian oil from global markets could drive prices up to $130-140 per barrel, explaining the implications of secondary sanctions. He had said that India would swiftly transition to other suppliers to fulfil its oil requirements if any supply disruption occurred.Russian crude oil constituted approximately $50.3 billion of India’s imports in FY25, representing over one-third of the country’s total crude expenditure of $143.1 billion.