NEW DELHI: India’s state oil refiners will continue to use annual contracts to secure oil supplies and hedge against market volatilities as the future of cheap Russian purchases is in doubt, the oil ministry said in a report to parliament on Tuesday.
India has emerged as the leading buyer of Russian seaborne oil, which is sold at a discount after some Western nations shunned purchases and imposed restrictions on Russian exports over Moscow’s 2022 invasion of Ukraine.
However, U.S. President Donald Trump, who announced 25% import tariffs on Indian goods last month, is threatening further levies due to India’s Russian oil purchases. And state refiners are currently awaiting clarity from the government on whether to continue importing Russian oil.
“Increased imports of Russian crude into India may not last forever,” the ministry said in a report responding to a parliamentary panel’s questions that did not directly mention the United States or Trump’s threatened tariffs.
The report said that state refineries were moving forward with all of their term contracts with other suppliers and regions to secure supply requirements.
Refiners consider factors including supply security, international politics and trade relations when finalising their procurement plans, it added.
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“This approach ensures both energy security and the procurement of crude oil at optimal value,” the report said.
India, the world’s third-largest oil importer and consumer, relies on Russian crude for more than a third of its imports.
State refiners, which account for over 60% of the country’s 5.2 million barrels per day of refining capacity, have paused purchases of Russian oil due to narrowing discounts. Private refiners Reliance Industries Ltd, Nayara Energy, and HPCL-Mittal Energy Ltd are continuing with their purchases.
Trump has made bringing an end to the war in Ukraine a priority of his administration. He is due to meet with his Russian counterpart Vladimir Putin, with whom he’s had a tumultuous relationship, in Alaska on Friday as part of his efforts to secure a peace deal.
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