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What alternatives could India consider to Russian oil?

India, which imports more than one-third of its oil from Russia, will likely turn to other suppliers in the Middle East, Africa, and elsewhere if forced to reduce Russian imports by possible U.S. sanctions.

Why is India importing Russian oil?

India began buying Russian oil at a discounted price after the West imposed sanctions against Moscow for its invasion of Ukraine 2022.

Russia is now India's top supplier, with 35% of India’s total supplies. This is up from a little over 2% just before the Ukraine war.

The global crude price surged to $137 a barrel in response to fears of a shortage following the Western-led sanctions, before stabilizing. Discounted Russian crude has lowered the costs of Indian refiners. India imports over 85% of the oil it needs.

How much Russian oil does India buy?

Trade data revealed that the world's third largest oil importer and user received approximately 1.75 million barrels of Russian oil per day in the first six months of this year. This is up 1% compared to a year earlier.

Private refiners Nayara Energy, Reliance Industries Ltd, and Reliance Industries Ltd, operators of the largest refinery complex in the world, have long-term contracts with Rosneft.

Why does Trump want India to cut russian oil imports?

Donald Trump, the U.S. president, has announced that he will raise the tariffs on goods imported to India from 25% to a substantial amount in light of New Delhi's continuing purchases of Russian crude oil. He warned that countries buying Russian exports may face sanctions if Russia does not reach a deal with Ukraine.

New Delhi has refused to bow down, citing its close economic ties with Russia as well as its long-standing relations.

The country's refiners, however, have stopped buying Russian oil.

What are India's options if it can't buy Russian oil?

India also buys oil in the United Arab Emirates and Iraq, besides Russia.

Indian refiners buy most of their oil from Middle Eastern producers through annual agreements that allow them to request additional supplies every month. Since Trump's warning about sanctions, refiners bought crude oil from the United States as well as the Middle East, West Africa and Azerbaijan.

Hardeep Singh Puri, the oil minister, says that India's supply sources have been diversified to around 40 countries. He also adds that Guyana, Brazil, and Canada are supplying more products on the market.

(source: Reuters)