India's Shift from Russian Oil: Navigating Trade Talks and Sanctions

India's Russian oil imports declined in January amid Western sanctions and U.S.-India trade discussions. In response, Indian refiners are boosting imports from the Middle East. The decline, which began in December, presents challenges for Russia to find alternative buyers for its crude.

India's imports of Russian oil saw a dip in January, marking a continuation of the decline initiated in December. This trend emerges as Indian refiners seek alternative suppliers amidst Western sanctions and ongoing U.S.-India trade negotiations, according to data and sources obtained by Reuters.

President Donald Trump announced a trade agreement with India, aiming to reduce tariffs to 18% from 50%, contingent on New Delhi ceasing Russian oil purchases and lowering trade barriers. In response, Indian refiners have adjusted their crude import strategies, increasing reliance on Middle Eastern suppliers.

January data shows a 9% drop in daily Russian oil imports from December. Indian refiners have not received a mandate to halt Russian oil purchases but are considering a transition period to complete current contracts. Meanwhile, increased storage of Russian crude at sea reflects the trade shift's impact on the freight market.

(With inputs from agencies.)