India Cuts Russian Oil Imports Following U.S. Trade Deal

The Government of India is significantly reducing its imports of Russian crude oil as part of a trade agreement with the United States. Following a deal announced in February 2026, U.S. President Donald Trump rescinded a 25% tariff on Indian goods after New Delhi committed to stop importing Russian oil directly or indirectly. Imports have already declined from a mid-2025 peak of over 2 million barrels per day to roughly 1 million barrels per day in January, with projections suggesting a further drop to 500,000–600,000 barrels per day by March 2026.

Major Indian refiners, including Indian Oil Corporation, Bharat Petroleum, and Reliance Industries, have stopped accepting new offers for Russian crude for March and April deliveries. To replace these supplies, the Indian government has urged refiners to prioritize hydrocarbons from the United States and Venezuela. Reliance Industries recently purchased 2 million barrels of Venezuelan oil via the trader Trafigura. However, some refiners face technical challenges matching U.S. light sweet oil with refineries designed for heavier grades.

Russia has responded by offering record price discounts to China to offset the loss of Indian demand, with discounts on ESPO Blend widening to nearly $9 per barrel. While the Kremlin maintains that India is free to diversify its suppliers, the U.S. has warned it will monitor procurement and may reinstate tariffs if India resumes Russian imports. Nayara Energy, a Russia-backed refiner, may be granted a special dispensation to continue its purchases.