Indian refiners are preparing to significantly reduce imports of Russian oil in response to new U.S. sanctions targeting Russia’s two largest producers, Rosneft and Lukoil. This is according to industry sources on Thursday. The move could help clear a major obstacle in India’s trade negotiations with the United States.
The decision comes as India faces punitive 50% tariffs on exports to the U.S. Half of these are linked to its ongoing purchases of Russian crude. New Delhi is currently negotiating a potential trade deal that could lower those tariffs. They may be reduced to levels similar to other Asian nations, in exchange for gradually winding down Russian oil imports.
Since Moscow’s 2022 invasion of Ukraine, India has become the largest buyer of discounted Russian seaborne crude. It imported around 1.7 million barrels per day in the first nine months of 2025.
US Sanctions on Russia
The U.S. sanctions announced on Wednesday marks the first Russia-related measures of President Donald Trump’s second term. This reflects his growing frustration with Russian President Vladimir Putin. The sanctions order companies to end all dealings with Rosneft and Lukoil by November 21, according to the U.S. Treasury.
Private energy giant Reliance Industries Ltd., India’s top importer of Russian crude, plans to cut or completely halt its purchases. This includes those under its long-term supply deal with Rosneft, sources familiar with the matter said.
“Recalibration of Russian oil imports is ongoing, and Reliance will be fully aligned with Government of India guidelines,” the company said in a statement.
Looming Cuts
India’s state-run refiners Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL), and Hindustan Petroleum Corp (HPCL) are also reviewing contracts and trade documents to ensure they are not sourcing oil directly from the sanctioned Russian producers, a source confirmed.
“There will be a massive cut,” one refinery source said. “It won’t go to zero immediately, as some barrels will still come through intermediaries.”
Another refinery official noted that the situation hinges on banking channels: “If banks approve payments, we can buy. Otherwise, my intake will be zero.”
Reliance, controlled by billionaire Mukesh Ambani, operates the world’s largest refining complex in Jamnagar, Gujarat. It has a deal to import about 500,000 barrels per day from Rosneft. The company has already begun sourcing spot cargoes from the Middle East and Brazil to offset the expected shortfall.
Before the new sanctions, Reliance had been considering halting Russian oil imports for one of its export-oriented refineries. This was ahead of the EU ban on refined products made from Russian crude, which takes effect in January.
Meanwhile, Nayara Energy, partially owned by Rosneft, also buys Russian oil but has not commented on whether it will change its purchasing strategy.
Although India’s state refiners seldom buy directly from Rosneft or Lukoil preferring to work through intermediaries the latest sanctions are expected to curb Russian crude flows to India sharply.
