Here’s Why India Still Buys Russian Oil, Despite U.S. Pressure

International News: U.S. President Donald Trump is unhappy with India for buying oil from Russia. On the night of August 4, he said that the U.S. may add more taxes (tariffs) on Indian oil imports if India does not stop buying from Russia.

Even after this warning, India has not stopped importing Russian oil. The reason is economic. If India reduces the amount of oil it buys from Russia, it could lose about $1 to $1.5 per barrel in profit from refining.

Tariffs on Indian Goods From August 7

Last week, Trump announced that the U.S. will put 25% tariffs on products imported from India starting August 7, 2025. The U.S. Treasury Secretary also warned China, saying that if it continues buying oil from Russia, it may also face high tariffs. India has received similar warnings.

India’s Russian Oil Imports Have Grown Fast

India is now one of the biggest buyers of Russian oil. After the Russia-Ukraine war began in 2022, Russian oil became cheaper. India started buying more of it.

• Between 2018 and 2022, only 1.5% of India’s oil came from Russia.
• In 2023, this grew to 19.3%.
• In 2024–2025, it has reached 33–35%.

Experts from JM Financial say that the U.S. wants to put pressure on Russia to stop the war with Ukraine. If India stops buying oil, prices may go up. This could make it harder for Trump to lower U.S. interest rates. But right now, Trump’s strong words suggest the issue won’t be solved easily.

How Indian Companies Will Be Affected

If India stops importing Russian oil:

• Oil companies like HPCL, BPCL, and OMCs will lose profits.
• MRPL and CPCL may face big losses.
• Even Reliance Industries could see a small drop in earnings.

Because of the Russian oil discount ($3–$4 per barrel), Indian companies have earned more—about $1 to $1.5 extra per barrel since 2023. Russian oil helps meet 30–40% of India’s oil needs. If this ends, profits will fall.

For example:

• If profits fall by $1 per barrel:
• OMCs' earnings (EBITDA) may fall 8–10%
• MRPL and CPCL may fall 20–25%
• Reliance’s overall earnings may fall 2%

Oil Prices May Go Up Globally

If India stops buying oil from Russia and countries like China do not increase their purchases, global oil prices may rise. Right now, China buys around 2 to 2.5 million barrels per day from Russia, while its total need is 16.5 million barrels per day.

If both India and China change their buying patterns, the global oil market may face big changes, and prices could rise quickly.