Indian refiners turn from Russia to the Middle East

• Focus on trade deal with US
• Opec market share in India rising
• Russian oil imports at two-year low

Indian refiners are redrawing crude import strategies to shift away from top supplier Russia and boost imports from the Middle East.

The move could help New Delhi clinch a trade deal with the United States to lower tariffs.

India became the top buyer of discounted Russian seaborne crude after the 2022 invasion of Ukraine, but the trade drew backlash from Western nations targeting Russia’s energy sector with sanctions, saying oil revenues help it fund the war.

The shift away from Russia comes as Middle East producers, armed with higher output quotas from Opec, are keeping global markets well-supplied, softening the impact on prices.

India’s Russian oil imports fell to their lowest in two years in December, while Opec’s share of imports hit an 11-month high, trade data showed.

Indian refiners have begun scaling back Russian oil purchases following discussions at a government meeting to help accelerate a US-India trade deal, three refining sources said.

The oil ministry’s Petroleum Planning and Analysis Cell is collecting weekly data on refiners’ purchases of Russia and US crude, sources told Reuters this month.

In the latest change, state refiner Bharat Petroleum Corp awarded one-year tenders to buy Iraqi Basrah and Omani crude to trader Trafigura and is in the market to buy Murban oil from the UAE under a separate tender, said the sources, who sought anonymity.

From April, Trafigura will supply four cargoes of Oman crude every quarter at 75 cents a barrel below Dubai quotes and one parcel of Basrah Medium at a discount of 40 cents a barrel to the grade’s official selling price, said two traders.

BPCL and India’s oil ministry did not respond to Reuters requests for comments.

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The US, already seeking to narrow its trade deficit with India, doubled import tariffs on Indian goods to 50 percent last year to punish it for heavy purchases of Russian oil.

State-run Hindustan Petroleum, Mangalore Refinery and Petrochemicals and private refiners HPCL-Mittal Energy Ltd have already stopped buying Russian oil.

Apart from the Middle East, Indian refiners have also increased purchases from regions such as Africa and South America.

Indian refiners have also boosted purchases of US oil to partly replace Russian oil and narrow the trade deficit with Washington, while also scouting for Venezuelan oil.