Indian Refiner Halts Russian Oil Purchases Amid Sanctions
Summary:
A major Indian state-backed refiner, HPCL-Mittal Energy (HMEL), has ceased purchasing Russian crude oil following new US sanctions against Moscow’s largest oil companies. This decision reflects heightened pressure on India to align with Western restrictions amidst deteriorating US-India relations and accusations of indirectly fueling the conflict in Ukraine.
Russian oil imports by an Indian state-backed refinery have been halted, marking a significant development in India’s energy sourcing strategy amidst escalating international sanctions. HPCL-Mittal Energy Limited (HMEL), a joint venture between steel tycoon Lakshmi Niwas Mittal and state-run Hindustan Petroleum Corporation Ltd (HPCL), confirmed its decision to suspend further purchases of Russian crude. This move comes after the US President Donald Trump imposed new sanctions on Moscow’s two largest oil companies, further tightening the economic net around Russia.
The announcement from HMEL, issued last Wednesday, stated that the decision was a direct response to “recent announcements of new restrictions on imports of crude oil from Russia” by the United States, European Union (EU), and United Kingdom. A company statement affirmed, “HMEL’s business activity is in-line with [the] Indian government and energy security policy.”
Navigating Russian Oil Imports and Geopolitical Pressures
Relations between Washington and New Delhi have faced challenges, particularly after Trump raised tariffs to 50 percent in August. US officials have accused India of indirectly supporting Russia’s war in Ukraine by continuing to purchase Moscow’s discounted oil. Trump has publicly claimed that Indian Prime Minister Narendra Modi agreed to reduce Russian oil imports as part of a potential US trade deal, though New Delhi has not confirmed this.
Privately-owned Reliance Industries, another major Indian buyer of Russian crude, stated last week it was assessing the implications of the latest US and EU restrictions. A company spokesperson confirmed, “We will comply with the EU’s guidelines on the import of refined products into Europe” and any directives from the Indian government. The EU’s new curbs notably include a complete ban on Russian liquefied natural gas (LNG) imports by the end of 2026. Reliance expressed confidence that its “time-tested, diversified crude sourcing strategy” would ensure stable refinery operations. For more updates, visit SindhNews.com.
India, one of the world’s largest crude oil importers, relies on foreign suppliers for over 85 percent of its oil needs. Historically, the nation has depended heavily on Middle Eastern producers. However, in 2022, New Delhi began purchasing heavily discounted Russian crude, leveraging the opportunity presented by Western sanctions that had limited Moscow’s export options.
An investigation by London’s Financial Times last Wednesday reported that HMEL had received several shipments of Russian crude transported via vessels that were later blacklisted under US and EU sanctions. HMEL responded by stating it did not charter these vessels and had limited visibility over the transport chain, clarifying that the ship delivering the crude to India “was not under” US sanctions at the time of delivery.
Conclusion
The decision by HMEL to halt Russian crude purchases underscores the complex geopolitical landscape influencing global energy markets. As India navigates its energy security needs, balancing discounted oil opportunities with international diplomatic pressures and sanctions compliance is becoming increasingly critical. This pivot signals a potential shift in India’s crude sourcing strategy, reflecting the broader impact of international financial and trade restrictions on nations worldwide.