India has reportedly agreed to phase out Russian oil imports under pressure from US President Donald Trump, who announced on social media that Indian Prime Minister Narendra Modi plans to “stop buying Russian oil.”
This move, framed as part of a broader trade deal, could see India increasing purchases from the United States and potentially Venezuela. Trump said the agreement could involve $500 billion worth of US energy, coal, technology, and agricultural products, with a tariff reduction on Indian goods from 50% to 18% and Indian cuts on US products to zero.
India has yet to officially confirm the deal, though US petroleum supplies are expected to be included.
India has already begun reducing reliance on Russian crude following US sanctions on Russian oil firms Rosneft and Lukoil, with shipments dropping nearly a third to 1.3 million barrels per day in recent weeks.
Indian oil firms are also exploring supplies from over 40 countries, including Canada and the US. However, fully replacing Russian oil — which accounts for about a quarter of India’s 5 million bpd imports — could take months or years and raise India’s oil import bill by $9-11 billion annually, as Russian barrels are heavily discounted compared to US crude, dw.com reports.
Operational adjustments at Indian refineries will also be needed to process lighter US crude, optimized for heavier Russian Urals crude.
Venezuela, meanwhile, could emerge as a potential supplier, especially given its heavy, sulfur-rich crude favored by Indian refineries.
Trump’s mention of Caracas follows the US-backed interim government’s agreement to sell up to 50 million barrels to US refiners and reforms aimed at attracting foreign investment.
However, Venezuela’s oil production remains around 900,000 bpd — far below its 3-4 million bpd output in the early 2000s — and years of underinvestment, corruption, and sanctions will make ramping up supplies to meet India’s demand a long-term challenge.
Logistical hurdles, sanctions, and cost factors could further complicate deliveries.
For the global oil market, any rerouting of Indian imports is expected to be gradual.
Existing Russian crude contracts and shipments with up to 90-day lead times must be honored, limiting immediate disruption.
Meanwhile, China, Turkey, and African nations may increase Russian purchases, and OPEC+ members, US shale, and emerging producers like Brazil, Guyana, and Argentina provide additional buffers against shortages.
Yet a sudden halt to Russian supplies by India could quickly strain this surplus.
