Indian refiners consider cutting Russian oil imports following new U.S. sanctions law

Indian refiners, who were previously planning November deliveries, may reduce their oil purchases from Russia following the enactment of a new U.S. sanctions law, according to Bloomberg's September 22 report. The third-largest crude importer in the world had been sourcing over half of its imports from Russia in recent months to offset high prices and ongoing Middle East supply disruptions. However, top processors are now actively seeking alternative cargoes, sources told Bloomberg.

New Delhi may limit Russian oil imports to between 20% and 30% of the country's total imports in the near future to reduce its status as the top buyer of Moscow's seaborne oil, according to sources. India will continue to engage in negotiations with the U.S., which has the authority to impose tariffs on countries that purchase Russian crude under the new legislation.

Kpler data shows that imports from Russia have eased and may average around 1.9 million barrels per day in September, representing more than 35% of the total and the lowest level since April.

However, replacing Russia's oil shipments will be challenging due to the larger volumes compared to other suppliers like Venezuela or Iran, and higher market prices. Russian Urals delivered to India cost $133 per barrel at the end of last week, while Middle Eastern grades such as Oman and Murban were priced several dollars higher.

India will monitor whether Washington applies the measures to all major Russian energy buyers, including China, according to Bloomberg sources. The Trump administration can impose tariffs within 30 days on goods from major Russian energy buyers at rates potentially reaching 100%, placing the decision firmly in the government's hands.