Indian refiners in limbo over Russian crude following Trump’s tariff post

India’s oil refiners are seeking clarification from the government in New Delhi after US President Donald Trump said he would impose new trade penalties on India, citing the country’s ongoing purchases of Russian energy.

In a post on social media, Trump announced plans to impose a 25% tariff on Indian exports to the United States starting August 1, along with an additional penalty tied to its energy and defence ties with Moscow, Caliber.Az reports per foreign media.

“Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE,” Trump said.

“INDIA WILL THEREFORE BE PAYING A TARIFF OF 25 per cent, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST.”

Following Russia’s full-scale invasion of Ukraine in 2022, India emerged as the largest single buyer of seaborne Russian crude outside the European Union. The country’s refiners have consistently imported more than 1 million barrels a day since then, according to three people familiar with the trade. They said they had approached the government for guidance on how Trump’s remarks could affect future purchases.

India imported around 1.63 million barrels a day of Russian oil in 2024, and similar levels have been maintained into 2025, according to ship-tracking data. That volume represents nearly half of Russia’s seaborne crude exports.

Refiners are now awaiting a formal response from India’s oil ministry regarding shipments scheduled to arrive after the August 1 deadline. The ministry declined to comment.

Despite the uncertainty, Indian refiners believe they could secure alternative sources of oil if required to halt imports from Russia. However, officials cautioned that such a shift would significantly raise import costs.

Prashant Vasisht, senior vice president at the ratings agency ICRA, said that any sustained rise in oil prices would hit state-owned refiners’ margins. “A $10 per barrel increase in crude oil prices — sustained over a period of a year — would raise their oil import bill by about $13 billion to 14 billion,” he noted.

Meanwhile, the European Union has increased pressure on countries importing Russian energy by planning to ban imports of diesel produced from Russian crude — regardless of where the refining takes place — a move India has pushed back against.