India bows to US, Europe pressure, may cut Russian oil purchase

India is expected to sharply reduce its imports of crude oil from Russia, its largest supplier, following fresh sanctions imposed by the United States and Europe, according to a media report on Thursday.

Two refining sources said that Reliance Industries Ltd, the country’s top private buyer of Russian oil, plans to significantly cut or completely halt its crude imports from Moscow. State-run refiners are also reassessing their purchase plans to ensure compliance with the new restrictions.

The decision comes after the U.S. and its allies imposed additional sanctions on major Russian energy firms, including Rosneft and Lukoil, over the ongoing conflict in Ukraine. Britain also sanctioned the two companies last week, while the European Union approved a 19th round of sanctions that includes a ban on imports of Russian liquefied natural gas (LNG).

Oil prices jumped by nearly 3% on Thursday as traders reacted to India’s plans to review its Russian oil imports. Brent crude futures rose by $1.94, or 3.1%, to $64.53 per barrel by 0428 GMT, while U.S. West Texas Intermediate (WTI) crude increased by $1.89, or 3.2%, to $60.39 per barrel.

According to report, India’s state-owned refiners have begun reviewing their supply arrangements to ensure that none of their crude shipments come directly from Russian oil giants Rosneft or Lukoil. Privately held Reliance Industries, which has been among the largest importers of Russian oil since 2022, is reportedly planning to adjust its buying pattern in line with the Indian government’s policy direction.

India’s overall imports of Russian crude had surged in the past two years after Western buyers cut back on purchases, allowing Indian refiners to secure cheaper oil. However, with tighter sanctions and increasing pressure from the U.S., Indian refiners may now shift toward alternative suppliers in the Middle East and Africa. In the near term, traders are keeping a close eye on three key factors that could influence oil prices: OPEC+ production levels, China’s crude stockpiling activity, and developments in the ongoing wars in Ukraine and the Middle East.