India's Strategic Shift: Scaling Back on Russian Oil Imports

Following a trade deal with the U.S., India is preparing to wind down Russian oil imports. The transition impacts Indian refiners like Nayara Energy and involves increasing imports from the Middle East, Africa, and potentially Venezuela. The move aligns with Western sanctions targeting Russia's energy sector.

In light of a recent trade deal with Washington, Indian refiners are gradually reducing their reliance on Russian oil. The move follows U.S. President Donald Trump's announcement of an agreement with Indian Prime Minister Narendra Modi, focusing on decreasing U.S. tariffs in exchange for India importing more American oil.

Despite slowing purchases, Indian refineries have commitments for Russian oil cargoes in February and March. The potential halt of imports could affect operations at Russia-backed Nayara Energy's refinery. India became the top buyer of discounted Russian crude after Ukraine's invasion in 2022, facing pressure from Western nations to reduce this dependency.

Nayara Energy plans to cease importing Russian oil during its upcoming refinery maintenance in April. Other refiners are pausing new orders while evaluating government guidance on future import strategies. Indian Oil Corp, Bharat Petroleum Corp, and Nayara continue assessing viable alternatives in Middle Eastern and South American markets.

(With inputs from agencies.)