India oil refiners squeezed by anti-Russia push from US and EU
India’s oil refiners have been thrown into disarray after President Donald Trump cited their purchases of Russian crude as a reason for imposing hefty 25% import tariffs on all goods from the Asian nation. The processors, who have become heavily dependent on cut-price Russian energy over the past few years, were already dealing with a proposed European Union ban on their exports of diesel made from Russian oil. With Washington now also taking an increasingly hard line against the Kremlin, a scramble for alternative sources of crude is turning into a frenzy. A senior executive at a major Indian oil refiner said the company would try to source more crude from the Middle East and Africa, while also looking to the government for guidance on how it should proceed. The situation was not entirely unexpected, but would increase costs and reduce margins, said the executive, who asked not to be named due to the sensitivity of the matter. India is heavily dependent on imported energy, and more than a third of its overseas purchases of crude come from Russia. Along with China, it has become the most important buyer of Moscow’s oil, with many of its refiners coming to rely on the discounted shipments. Earlier this month, the country’s crude processors were hit by the EU’s intention to ban imports of diesel made in the country from Russian oil, with Nayara Energy Ltd. specifically targeted with penalties. The processors are now finding themselves under even more pressure from Washington.
Oil Prices Hold Gains Amid Tariff Threats and Trade Turmoil
Oil prices traded flat on Thursday in Asian markets, holding on to gains from earlier in the week as traders continued to weigh intensifying geopolitical risks and new tariff deals that could reshape global crude flows. As of Thursday morning in Asia, WTI crude had dipped to $69.99 per barrel and Brent crude was trading at $73.10 per barrel. Though slightly lower on the day, both benchmarks have risen approximately 7% this week, underpinned by rising concern over supply constraints stemming from new U.S. sanctions and trade policies. This week, President Trump shortened the deadline for Russia to reach a peace agreement with Ukraine from 50 days to just 10–12 days, warning of secondary tariffs of up to 100% on countries that continue to import Russian oil if no progress is made. India, a major buyer of discounted Russian crude, is at the center of this pressure campaign. On Wednesday, Trump confirmed that 25% tariffs on Indian imports will take effect on Friday, although trade talks between the two nations are ongoing. The uncertainty is causing anxiety among Indian refiners and reverberating through global oil markets. The Brent-Dubai spread has shifted deeper into discount territory as refiners look to the Middle East for more secure alternatives. “Concerns that secondary tariffs on countries importing Russian crude will tighten supplies continue to drive buying interest,” said Toshitaka Tazawa of Fujitomi Securities. On the same day, the EIA reported a 7.7 million barrel build in crude inventories for the week ending July 25, the largest in months, bringing stockpiles to 426.7 million barrels. The increase was attributed to a sharp drop in exports, which fell by 1.16 million barrels per day. Despite the bearish crude build, product inventories told a more supportive story. Gasoline stocks fell by 2.7 million barrels, far exceeding the 600,000-barrel draw forecast by analysts, suggesting healthy demand during the peak of the U.S. driving season. Meanwhile, distillate stocks rose by 3.64 million barrels, easing concerns over tightness in that market segment. The mixed data produced a muted response from markets, as geopolitical headlines continued to overshadow fundamental inventory signals. The U.S. also unveiled new sanctions on Wednesday, targeting more than 115 Iran-linked individuals, companies, and ships, escalating its “maximum pressure” campaign following airstrikes on Iranian nuclear sites in June. At the same time, the administration warned China, the top buyer of Russian and Iranian oil, that it could face steep tariffs if it continues these purchases. These actions point to a broader effort by Washington to isolate major oil producers through economic pressure, raising the prospect of constrained global supplies in the months ahead. Demand concerns, especially following the Fed’s relatively hawkish statements on Wednesday, are holding oil prices back, and traders will be watching inflation data and jobs numbers set to come out today and tomorrow.