Rust on crude oil
Donald Trump is constantly making pressure on India not to buy oil from Russia. On the night of Monday, August 4, he also threatened to put additional tariffs on purchasing oil from Russia. Even after America’s opposition, India is not stopping the import of Russian Oil. The main reason behind this is related to the economy. If he reduces buying Russian oil, he may fall from 1 to $ 1.5 per barrel in the grass refinery margin.
US President Donald Trump announced a 25% tariff on goods coming from India last week, which will be applicable from 7 August 2025. The American Treasury Secretary has also warned China that if it continues to buy oil from Russia, he will have to face heavy tariffs. India has also been threatened with stopping buying Russian oil.
India and Russia oil import
India is one of the big buyers of Russian oil. There was a huge increase in India’s import after the Russia-Ukraine war started in 2022 and the prices of Russian oil fell. In FY2018-FY2022, the share of Russian oil in India’s total crude imports was only 1.5%, which increased to 19.3% in FY 2023 and 33-35% in FY 2024- FY 2025-FY 2025. JM Financial analysts believe that the step is part of the US strategy to pressurize Russia so that Russia enters a peace agreement with Ukraine. If India stops importing Russian oil, crude prices may increase rapidly, which can weaken Trump’s pressure on the US Federal Reserve to reduce interest rates. But according to which Trump is still threatening. By the way, it does not seem that this issue will be solved easily.
Effect on oil companies
According to JM Financial, if India stops Russian oil imports, it will have a major impact on oil marketing companies and CPCL/MRPL, while Reliance Industries will also have a mild negative effects. Refiners from FY23 got a gram of $ 1–1.5 per barrel from FY23, which meets India’s 30-40% crude needs from FY23 due to a discount of $ 3-4 per barrel of $ 3-4 per barrel. The prohibition on this margin can be affected. A deficiency of $ 1 dollars per barrel Grm Ebitda 8-10%of OMCs in FY26, 20-25%of MRPL/CPCL, and Reliance’s total Ebitda can be affected around 2%.
Crude prices may increase
If India stops Russian oil imports and China or other countries do not compensate for it, then crude prices may increase rapidly. China already buys 2-2.5 million barrels per day Russian oil, while its total demand is 16.5 million barrels per day.