Key facts
- India's Russian oil imports fell 16.5% in August to 2.1 million barrels per day.
- New US sanctions law allows tariffs up to 100% on major Russian oil buyers.
- Russia remains India's largest crude supplier.
- Indian refiners are seeking alternative supplies amid concerns over future Russian purchases.
- India's crude import bill rose 48.4% to $74.8 billion from April to August.
- The US law does not automatically impose tariffs but gives the administration authority.
India's imports of Russian crude oil saw a 16.5% decline in August, with further decreases anticipated for September, as a new U.S. sanctions law grants Washington the authority to impose tariffs of up to 100% on significant buyers of Russian energy. Shipments to India dropped to approximately 2.1 million barrels per day in August from record levels in July, according to trade data. Preliminary Kpler data indicates September imports at 1.9 million barrels per day.
The August decline predates the enactment of the new U.S. law, suggesting that improved supply routes from the Middle East and other factors were already influencing refiners' decisions. Purchases of Iraqi crude jumped about 25% in August, while Saudi imports rose 1.5%. India's total crude imports decreased by 8.8% in August to 4.44 million barrels per day.
President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act on Friday, which empowers the administration to impose tariffs on goods from major buyers of Russian energy. While the law does not automatically enact these tariffs, it presents a significant risk for India, whose crude import bill has surged 48.4% year over year to $74.8 billion between April and August, despite a slight volume slip. The potential for tariffs on other Indian exports to the U.S. could negate the cost savings previously achieved from discounted Russian barrels.