Indian refiners, currently lining up November crude cargoes, may cut purchases from Russia as fresh U.S. sanctions take effect and the threat of punitive tariffs on nations buying Russian oil escalates. The world's third-largest crude importer had recently sourced over half of its total imports from Russia to counter high prices and persistent supply disruptions in the Middle East. However, according to people involved in the discussions, major Indian refining companies have begun seriously scouting for alternative cargoes over the past few days. These sources spoke on condition of anonymity since the talks are not public.

In an effort to shed its status as the largest buyer of Russian seaborne crude, New Delhi could cap Russian import share at between 20% and 30% of India's total intake in the near term, insiders said. Meanwhile, India will continue negotiations with Washington. The new law signed by U.S. President Donald Trump last week authorizes tariffs on countries purchasing Russian oil, and India falls within its scope. India faced similar tariff threats last year, which were later withdrawn.

According to Kpler data, Indian imports of Russian crude have already started to decline. September shipments are projected to average around 1.9 million barrels per day, representing over 35% of total imports, the lowest level since April. However, replacing Russian supply will not be easy. Russia's volumes far exceed those of Venezuela or Iran, and overall market prices remain elevated. Argus Media data shows Russian Urals crude delivered to India stood at roughly $133 per barrel over the weekend, while Middle Eastern grades like Oman and Murban traded several dollars higher.

Over the past year or more, India has repeatedly adjusted its Russian crude purchases as Washington's pressure on Russian oil trade has fluctuated. Even so, New Delhi has consistently stated that its primary procurement objective is to secure affordable energy for its 1.4 billion people.