India oil buyers pull all levers to replace Russian shipments

Oil Minister Hardeep Singh Puri has suggested India could take more oil from the US, citing plans by the Trump administration to boost output.

Oil refiners in India are reaching for all available options in the rush to make up for Russian flows hit by Washington’s latest round of sanctions, turning to the spot market while simultaneously seeking more long-term supplies from Middle Eastern producers.

State-owned processors have issued a slew of spot tenders in recent weeks, snapping up oil from all corners of the world including Middle East, Africa and the US. Some cargoes are scheduled to load as early as February, indicating the urgency of replacements for the Russian flows India has become reliant on.

The haste contrasts with comments from senior government officials, who have repeatedly suggested confidence that Russian crude will keep flowing once Moscow reassembles its dark fleet and works around the long list of measures announced earlier this month.

As Indian companies begin talks with Saudi Arabia and Abu Dhabi this week, traders say discussions between refiners and the OPEC producers will be tense. Buyers are effectively returning to long-term suppliers after two years of opportunistically prioritizing discounted Russian crude.

Washington may not be able to enforce all sanctions on traders, Russian tankers and more, but refiners’ fear of getting tangled in punitive measures could leave India battling to replace as much as 1.8 million barrels a day of Russian crude flows, or a third of the country’s total imports. That’s a tall order even in a well-supplied physical oil market, traders say.

Relationships will also have to be rebuilt, and cargoes rerouted, they added.

Aramco is in supply talks with Indian refiners for financial year 2025-2026 sales, traders said. Adnoc has also been approached, with at least one state-owned refiner seeking more cargoes from the company, one of the traders said.

Oil Minister Hardeep Singh Puri has suggested India could take more oil from the US, citing plans by the Trump administration to boost output. He also said Indian oil companies would sign a pact with Argentina, a plan which traders discount, arguing it is far from yielding any crude.

“We are in the market for whoever can supply,” Puri said on the sidelines of an industry event earlier this week.

Russia ranked as India’s no. 1 oil supplier by volume last year, according to analytics firm Kpler, beating Iraq and Saudi Arabia for the top spot. This is a stark difference from 2021, before the war, when Iraq, Saudi Arabia and the UAE were India’s three biggest suppliers. Flows from Russia were close to zero.