India Shifts Oil Sourcing Amid U.S.-Russia Trade Tensions

Indian refiners require time to phase out Russian oil imports following a U.S.-India trade agreement, potentially buying oil from the U.S. and Venezuela instead. India was the top buyer of discounted Russian oil post-Ukraine war, but U.S. wants to curb Russia's oil revenue. India diversifies its sources.

Indian refiners face the task of gradually reducing Russian oil imports as part of a recent trade deal between the U.S. and India. The agreement, reached between U.S. President Donald Trump and Indian Prime Minister Narendra Modi, includes a halt to purchasing Russian oil and a shift toward sourcing from the U.S. and potentially Venezuela.

According to sources, Indian companies have pre-booked cargoes, necessitating a wind-down period to honor existing commitments before imports cease. This trade deal aims to reduce U.S. tariffs on Indian goods while lowering India's trade barriers and diversifying crude sources, as its reliance on Russian oil has been contentious among Western nations.

India's move to reduce Russian oil imports began amid the backdrop of economic sanctions leveled against Russia by Western countries. With OPEC's share rising in Indian imports, the country turns to Middle Eastern, African, and South American suppliers in a strategic pivot to align with new trade expectations.

(With inputs from agencies.)