The US is pushing to include India’s Russian oil purchases in talks

The US is pushing to factor India’s Russian oil buying into trade discussions. While New Delhi typically steers clear of oil from countries under US sanctions, like Iran and Venezuela, it has, along with China, taken advantage of discounted Russian crude permitted under the G7 price-cap framework.

With post-monsoon demand climbing, Indian refiners show no sign of pulling back. People familiar with procurement plans say purchases from Russia will remain robust through November and December, though volumes may not reach the record levels seen in recent years.

India rejected calls to halt Russian oil purchases last month, despite President Donald Trump’s warning of new penalties and a 25% tariff. Citing the New York Times, Indian officials confirmed on August 2 that no directive had been issued to domestic oil firms to scale back imports from Russia.

The decision placed India’s government on a direct collision course with the Trump White House and signals that New Delhi has no plans to back out from its cheap energy supply anytime soon.

As earlier reported by Cryptopolitan, two senior government officials noted that Prime Minister Narendra Modi’s administration has not adjusted its oil policy. Foreign Ministry spokesperson Randhir Jaiswal emphasized at a previous press conference that India’s foreign policy decisions are not driven by external pressure.

India asked the US to drop tariffs on its Russian oil purchases

US officials held a day of discussions in New Delhi this week to smooth over tensions triggered by President Donald Trump’s 50% tariff on Indian goods. People familiar with the talks said India urged Washington to roll back the additional 25% tariff on Russian crude purchases, a levy Indian officials had repeatedly termed “unfair, unjustified, and unreasonable.” 

Some had even defended their Russian oil flows, claiming they were critical to stabilize the country’s energy system.

Nonetheless, after this week’s talks, officials from both countries called the negotiations “positive” and stated they would expedite work to finalize a trade deal. 

However, this is not the first time the two have come close to reaching an agreement. A deal was supposed to be wrapped up this fall, but talks collapsed after the two sides became more entrenched and Trump began pressing India over its engagement with Moscow. Washington also demanded greater entry into India’s dairy and farm markets, leading to the fallout.

Indian refiners reduced their Russian oil purchases in August

Oil refiners in India had scaled back purchases from Russia early last month, leading to a drop in imports. According to Bloomberg’s tracking data, Ukrainian drone strikes had also added to the decline, leaving shipments at roughly one million barrels a day on a four-week average, the lowest in nearly two years.

Nevertheless, economists believe Russian shipments should rebound, supported by strong Urals availability and a more conciliatory tone from Washington, after Trump called Modi this week to thank him for his support on ending the war between Russia and Ukraine.

New Delhi is still in discussions with key refiners but has yet to finalize any orders. However, that may change as trade discussions progress, and India considers where it might offer concessions.

What’s clear, though, is that Reliance Industries will play a big role, given its term deal with Rosneft PJSC that started earlier this year and accounts for a significant portion of Russian flows. Any cut in purchases by the Mukesh Ambani–led firm could weigh on total volumes, despite steady buying from other refiners.

Still, India could pivot toward Europe; however, the region’s recent effort to lower the price cap to $47.60 a barrel, down from the wider group’s $60 limit, has done little to influence Indian refiners. The EU also announced a 2026 ban on fuels produced from Russian crude, a move that could hurt India’s refiners, though details on what limits will be enforced remain unclear.

Get $50 free to trade crypto when you sign up to Bybit now