Indian Oil PSUs Halt Russian Crude Purchases Amid Diminishing Discounts and U.S. Pressure

India’s state-owned oil refiners have temporarily suspended spot purchases of Russian crude, citing a sharp decline in price discounts and increasing geopolitical pressure, particularly from the United States. Companies such as Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL), and Mangalore Refinery and Petrochemicals (MRPL) have reportedly refrained from placing new orders for Russian crude in the past week.

The price advantage that once made Russian oil attractive to Indian refiners has significantly reduced, with discounts dropping to their lowest levels since Moscow’s 2022 invasion of Ukraine. Refiners are now turning to alternative sources such as Abu Dhabi’s Murban crude and West African grades, which are offering more competitive pricing in the current market.

Adding to commercial concerns is growing political pressure from the United States. Former President Donald Trump, a frontrunner in the upcoming U.S. elections, has warned of imposing 100% tariffs on countries that continue purchasing Russian oil, should Russia fail to reach a peace agreement with Ukraine. As of August 1, Washington has already implemented a 25% tariff on Indian exports, with senior officials like Secretary of State Marco Rubio criticizing India’s continued energy trade with Russia.

Despite these developments, the Indian government has denied issuing any formal directive to limit Russian oil imports. Officials emphasized that decisions made by public sector undertakings (PSUs) are based on commercial viability, not diplomatic coercion. India has consistently opposed unilateral sanctions, maintaining that its energy decisions are guided by national interest.

Meanwhile, private refiners like Reliance Industries and Nayara Energy, the latter partly owned by Russia’s Rosneft, continue long-term imports under existing contracts. These two players accounted for nearly 60% of India’s Russian oil imports in early 2025, indicating that the private sector remains largely unaffected by the recent policy shift among PSUs.