# India’s State-Owned Refiners Keep Buying Russian Oil Even as New Delhi Seeks U.S. Tariff Relief
India’s energy landscape is caught in a geopolitical tightrope, balancing discounted Russian crude with mounting U.S. pressure. While private giant **Reliance Industries** has halted Russian oil imports for January 2026, state-owned refiners like **Indian Oil Corp (IOC)** and **Bharat Petroleum Corp (BPCL)** continue purchases, sustaining flows amid New Delhi’s push for tariff relief from Washington.[1][2][4]
## The Surge and Sanctions Backdrop
Since Russia’s 2022 invasion of Ukraine, India transformed into the world’s top buyer of discounted Russian seaborne crude. This shift filled a void left by Western sanctions on Moscow’s energy sector, which aimed to starve Russia’s war funding.[1][3][4] Imports peaked at around **2 million barrels per day (MMbpd)** in June 2025 but slid to a three-year low of **1.2 MMbpd** in December 2025—a 40% drop—due to stricter U.S. and EU measures.[1][3]
The economic allure was clear: cheaper oil bolstered India’s refining margins and curbed import bills. From 2022 onward, India snapped up €144 billion worth of Russian crude, redirecting Moscow’s exports from Europe to Asia.[5] Private players like Reliance, operator of the globe’s largest refinery complex at Jamnagar, led the charge, inking a 2024 deal with Rosneft for 500,000 bpd.[2] Yet, this drew Western ire, with the U.S. doubling tariffs on Indian goods to **50%** last year as punishment.[1][3][4]
## Reliance Bows to Pressure, State Firms Persist
The turning point came this week. On January 6, 2026, Reliance issued a firm denial on X (formerly Twitter): its Jamnagar refinery received no Russian crude in the past three weeks and expects none in January.[1][2][3] This rebutted a Bloomberg report citing Kpler data on three incoming tankers carrying 2.2 million barrels of Urals blend.[2] Deliveries to Reliance had already plunged to 270,000 bpd in December—under 20% of its imports—shifting to suppliers like Iraq, Saudi Arabia, and the UAE.[2][3]
U.S. President **Donald Trump** amplified the squeeze on January 5, warning of steeper tariffs if India doesn’t curb Russian buys.[1][2][3][4] With Reliance out, January imports could dip below **1 MMbpd**, the lowest in years, per LSEG data and sources.[1][4] Indian authorities, meanwhile, demanded weekly disclosures from refiners on Russian and U.S. oil purchases to track compliance during trade talks.[1][3]
Crucially, state-owned refiners aren’t blinking. Preliminary data shows January flows limited to **Nayara Energy** (Russia-backed, 400,000 bpd capacity), IOC, and BPCL.[1][4] Government sources note Nayara remains the primary buyer, its supplies pinched by EU sanctions that scared off others.[1][4] IOC and BPCL, key state players, have historically favored discounted Russian grades for their complexes, despite the backlash.[2]
## Geopolitical Chess: Tariffs vs. Energy Security
New Delhi faces a dilemma. Russian oil meets nearly 40% of India’s needs at times, vital for the world’s third-largest oil importer.[1] Halting it outright risks supply shocks and higher costs, especially with global prices volatile. Yet, U.S. ties are strategic—defense pacts, tech transfers, and a potential trade deal hang in balance.[1][4] Talks have been “fraught,” with the 50% tariffs hitting exports like pharmaceuticals and textiles.[3][4]
Trump’s rhetoric underscores the leverage: stop Russian oil or face escalation.[1][2] Reliance’s retreat signals caution, with its orders down 13% recently.[3] But state firms’ persistence highlights India’s pragmatic streak—prioritizing affordable fuel over full alignment. China now stands as Moscow’s sole major outlet post-Reliance pullback.[3]
| Key Players | January Russian Oil Role | Capacity/Notes |
|————-|—————————|—————|
| **Reliance Industries** | None expected | World’s largest refinery; halted buys[1][2] |
| **Nayara Energy** | Primary buyer | 400,000 bpd; Russia-backed, sanction-hit[1][4] |
| **IOC & BPCL** | Continuing purchases | State-owned; no comment yet[1][2][4] |
This table illustrates the shift: private caution versus state continuity.[1][4]
## Broader Implications for India’s Energy Strategy
The saga exposes India’s multi-vector foreign policy. While courting the West via Quad alliances, it hedges with Russia, a long-time arms and oil partner. U.S. pressure works on privates but tests state autonomy—BPCL and IOC report to the petroleum ministry, balancing mandates for cheap fuel against diplomacy.
Falling imports could ease tariffs, unlocking a trade pact. Yet, if state refiners dig in, escalation looms. Analytics firm Kpler notes sanctions’ bite: shadow fleets, payment hurdles, and insurance woes slow flows.[1] India might pivot more to U.S. crudes, but volumes remain modest.
For consumers, cheaper Russian oil meant stable pump prices; a drop could stoke inflation. Refiners like Nayara face constraints, potentially idling capacity without Moscow’s supply.[4]
## Navigating the Future
As January unfolds, eyes are on state refiners’ moves. Will New Delhi nudge IOC and BPCL to follow Reliance? Or prioritize energy security amid U.S. haggles? The blend of discounted barrels and tariff threats defines this high-stakes energy diplomacy. India’s refiners bought time with discounts since 2022; now, geopolitics demands recalibration.[1][2][3][4][5]
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Original source: CNBC Business – India’s state-owned refiners keep buying Russian oil even as New Delhi seeks U.S. tariff relief