India's Russian Oil Dilemma: Strategic Shifts Amidst US Tariffs

Indian refiners rely heavily on Russian oil, which constitutes a major portion of the country’s petroleum intake. While technically possible, shifting away from Russian crude would lead to significant economic and strategic challenges. US-imposed tariffs complicate the situation, forcing India to reconsider its oil import strategy amidst fiscal and geopolitical pressures.

Indian refiners, the world's largest users of Russian oil, find themselves in a challenging situation. While technically they can manage without Russian supplies, economic and strategic trade-offs loom large, industry analysts report.

Russian crude, vital for high distillate yields, constitutes about 38% of India's refinery intake. A shift from Russian to alternative sources would affect distillate outputs, yielding lower diesel and jet fuel amounts, Kpler, a global data provider, explained. Such changes are likely to affect India's monetary stability and energy planning.

The recent US tariffs—raising penalties on Indian imports to 50%—further complicated the equation, pushing Indian negotiators to explore diversified oil sources. Analysts caution that while India can technically adapt to reduced Russian barrels, the economic fallout could be substantial, including higher import costs, and a potential rise in global oil prices.

(With inputs from agencies.)