Business as usual: India buys 2 million barrels per day Russian oil in August despite US tariff

New Delhi: India's purchase of Russian oil has risen to 2 million barrels per day in August, as refiners continue to prioritise economic considerations in their sourcing decisions.

As much as 38 per cent out of an estimated 5.2 million barrels per day of crude oil imported in the first half of August came from Russia, according to global real-time data and analytics provider Kpler.

Imports from Russia at 2 million bpd were up from 1.6 million bpd in July. The increase in Russian flow was at the cost of purchases from Iraq, which declined to 730,000 bpd in August from 907 bpd in July, and Saudi Arabia which fell to 526,000 bpd from 700,000 bpd last month.

The US was the fifth largest supplier at 264,000 bpd, according to Kpler.

"Russian crude imports into India have so far remained resilient in August, even after the Trump administration's tariff announcement in late July 2025," said Sumit Ritolia, Lead Research Analyst (Refining & Modeling) at Kpler. "But the stability we're seeing now is mostly a result of timing - August cargoes were locked in back in June and early July, well before any policy shifts." What's showing up in the data today reflects decisions made weeks ago, he said, adding any real adjustment in flows - whether due to tariffs, payment issues, or shipping friction - will only start becoming visible from late September through October arrivals.

He noted that there's been no government directive to cut Russian volumes. "So from a policy standpoint, it's business as usual".

Arvinder Singh Sahney, chairman of Indian Oil Corporation - India's largest oil firm - too said the government has not given any instruction to go slow on purchases from Moscow in the aftermath of President Donald Trump's decision to slap an additional 25 per cent tariff on US imports from India -- raising the overall duty to 50 per cent -- as a penalty for the country's continued imports of Russian oil.

"Neither we are being told to buy nor told not to buy," he said. "We are not making extra effort to either increase or decrease the share of Russian crude." Russian oil accounted for about 22 per cent of the crude processed by IOC in April-June and the volumes are expected to remain the same in the near future, he said.

Separately, Bharat Petroleum Corporation Ltd (BPCL) Director (Finance) Vetsa Ramakrishna Gupta on an investor call said imports from Russia had declined last month from 34 per cent of overall imports in June quarter, as discounts on it had narrowed to USD 1.5 per barrel.

"As long as there is no new sanction on Russian oil, our procurement strategy will be 30-35 per cent of Russian crude for the remaining year," he had said.

India, the world's third-largest oil consumer and importer, had swiftly substituted market-priced oil with discounted Russian crude following Western sanctions on Moscow after its invasion of Ukraine in February 2022.

Russian oil, which accounted for less than 0.2 per cent of India's imports before the war, now makes up 35-40 per cent of the country's crude intake. The discounts however have narrowed from a high of USD 40 per barrel to just USD 1.5 last month.

Discounts this month have risen to over USD 2 per barrel.

Ritolia said Indian refiners are watching the situation closely. "There's growing interest in sourcing more barrels from the US, West Africa, and Latin America, not necessarily because they are walking away from Russian supply, but to hedge against possible disruptions. It's a shift in mindset - from margin maximization to energy security and logistical risk management." He however hastened to add that buying more cargoes from elsewhere in the world does not mean Indian refiners are replacing Russian barrels. "Crude buying is a continuous, complex process-driven by refinery configuration, grade compatibility, and economics. Indian refiners still need to source 60–65 per cent of their crude from non-Russian suppliers, and that mix hasn't suddenly changed. What we're seeing is added flexibility, not a deliberate pivot. Until there's a clear policy change or sustained shift in trade economics, Russian flows remain part of India's crude basket and talk of replacement is premature." Sahney said at no time was import of crude oil from Russia sanctioned and so India continued to purchase keeping in mind economic considerations.

"Such purchases will continue unless sanctions are imposed," he said. "We have not got any instruction (from the government) to either increase or decrease purchase. We are doing business as usual." About talk of refiners being asked to increase purchases from the US in a bid to placate Trump, IOC Chairman said, "Neither are we being told to buy more nor are we told to buy less from US or any other destination. Economic considerations dictate our actions."