Reliance, Nayara likely to increase Russia oil imports by 10-20% in September despite US tariffs

India's imports of Russia crude oil are set to rise in September despite a 50% Trump tariff in effect, Reuters reported on Thursday (28 August 2025).

Without India, Russia would struggle to maintain crude oil exports at existing levels.(Reuters)

Indian refiners—led by Reliance Industries Ltd. and Rosneft-backed Nayara Energy—are likely to increase Russian oil purchases by 10-20%, or by 150,000-300,000 barrels per day, from August levels, three trading sources said. The sources, who cited preliminary purchases data, could not be named because they were not authorised to speak publicly on the issue.

Russian producers are likely to cut prices to sell more crude because they cannot process as much in refineries that were damaged by Ukraine's drone attacks on Moscow's energy infrastructure.

Without India, Russia would struggle to maintain exports at existing levels, and that would cut the oil export revenues that finance the Kremlin's budget and Russia's continued war in Ukraine.

Reliance Industries and Nayara Energy did not immediately respond to a request for comment. India's oil ministry did not immediately respond to a request for comment on Thursday.

Crude Ties

India has become the biggest buyer of Russian crude since the US and EU sanctions came into effect in the aftermath of the Ukraine war in 2022. This has allowed Indian refiners to benefit from cheaper crude. But the purchases have drawn condemnation from US President Donald Trump, which increased US tariffs on Indian imports to 50% on Wednesday.

New Delhi says it is relying on talks to try to resolve Trump's additional tariffs, but Prime Minister Narendra Modi has also embarked on a tour to develop diplomatic ties elsewhere, including meeting Russian President Vladimir Putin.

US officials have accused India of profiteering from discounted Russian oil, while Indian officials have accused the West of double standards because the EU and the US still buy Russian goods worth billions of dollars.

Problem of Plenty

Ukraine has attacked 10 Russian refineries in recent days, taking offline as much as 17% of the country's refining capacity. Meaning, Russia now has more crude to export than process at its own facilities.

In the first 20 days of August, India imported 1.5 million barrels/day of Russian crude, unchanged from July but slightly below the average of 1.6 million barrels per day in January-June, according to data from Vortexa.

The volumes are nearly 1.5% of global supply, making India the largest buyer of seaborne Russian crude. That's about 40% of India's oil needs. China and Turkey are also big buyers of Russian oil.

India Strategy

India's increased buying of Russian oil has been to the detriment of more expensive supplies from the Organization of the Petroleum Exporting Countries. OPEC's share edged up in 2024 after an eight-year drop.

Russian exporters sold Urals crude loading in September at discounts of $2–$3 per barrel to benchmark dated Brent, the three traders said. The levels are cheaper than discounts of $1.50 per barrel in August, which were the narrowest since 2022, the traders said.

“Unless India issues a clear policy or trade economics shift significantly, Russian crude will likely remain a core part of its supply mix,” said Sumit Ritolia from Kpler.

Brokerage CLSA in a note also predicted only “a limited chance of India stopping Russian imports” unless a global ban is imposed.

If Indian imports of Russian crude were halted, the knock-on impact could be to reduce global supplies by around 1 million barrels/day and lead to a short-term spike in global prices to nearly $100 a barrel.

Traders said the full impact of sanctions and tariffs may only be visible in cargoes arriving to India in October, which will begin to trade in the next few days. In addition to the US tariffs, the EU has also tightened its price cap to limit Russia's oil revenues, which will complicate sales later this year.

The EU has set the cap at $47.60 per barrel from 2 September—15% below the Russian crude market price—restricting access to Western services for cargoes sold above the cap.