Indian state-run oil refiners have paused purchases of Russian crude over the past week amid shrinking discounts and renewed warnings from US President Donald Trump against buying energy from Moscow, Reuters reported citing industry sources.

New Delhi has been among the top buyers of seaborne Russian crude since Western sanctions altered Russia’s trade flows. But the latest shift suggests a cautious recalibration, especially by state-owned players such as Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL), Hindustan Petroleum Corp (HPCL), and Mangalore Refinery and Petrochemicals Ltd (MRPL), according to four people familiar with their procurement strategy, Reuters reported.

These companies, which typically procure Russian grades on a delivered basis, have turned to alternative suppliers in the spot market, particularly Middle Eastern crudes like Abu Dhabi’s Murban and some West African varieties, the sources said. Indian state refiners, which account for over 60% of the country’s 5.2mn barrels per day (bpd) refining capacity, collectively imported around 40% of the Russian oil India brought in during the first half of 2025.

Private refiners, including Reliance Industries and Nayara Energy—majority-owned by Russian entities such as Rosneft—continue to lift Russian oil under term contracts. These companies accounted for nearly 60% of India’s average Russian oil imports of 1.8mn bpd during the first six months of the year.

Reuters also noted that refiners are growing wary as the discount on Russian oil has narrowed to its lowest level since 2022, when the first wave of Western sanctions hit. Tighter supplies from Russia and resilient demand have pushed up prices, reducing the cost advantage that had previously made Russian crude attractive.

Concerns over compliance risks are also mounting. Refiners fear that the European Union’s latest sanctions package—targeting refined products made from Russian crude even if processed outside Russia—could pose hurdles for trade and financing, despite buyers sticking to the G7-led price cap. India has reiterated its stance against “unilateral sanctions” but may face secondary spillover risks in global banking and shipping channels.

Tensions further escalated after Trump, campaigning for re-election, warned on July 14 of 100% tariffs on countries buying Russian oil unless Moscow reached a peace agreement with Ukraine. On Wednesday, he announced a 25% tariff on goods imported from India effective August 1, though he also said negotiations were still underway. He warned that countries purchasing Russian arms and oil could face future penalties.

India remains Russia’s largest single oil customer, with Russian barrels accounting for roughly 35% of the country’s total crude imports. While private refiners are continuing purchases, the pullback by state-run firms could signal a cautious shift as geopolitical and pricing dynamics evolve, Reuters added.