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Mumbai.Sitharaman says India cannot suddenly stop Russian oil purchases amid US tariff threat and global supply concerns

India cannot suddenly stop buying crude oil from Russia and immediately shift to other suppliers, Finance Minister Nirmala Sitharaman said at the Business Line Changemaker Awards, stressing that energy security and the needs of 1.4 billion Indians remain central to the country’s decisions. She said India would continue to source crude from different parts of the world based on availability, suitability and domestic requirements.

Sitharaman’s remarks came after US President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act into law. The legislation gives the US President powers to impose tariffs of up to 100% on goods from countries that continue to buy Russian oil and gas. India and China are among the major countries covered by the measure.

Sudden shift could push global oil prices higher

Sitharaman said leaving Russian crude at once would put additional pressure on an already limited global supply pool. If India moved out of Russia and looked for the same volume elsewhere, the additional demand could push up prices, she said.

She also pointed to the importance of refinery compatibility. Indian refineries are designed to process particular grades and blends of crude, which means replacing Russian supplies is not simply a matter of finding another seller. India has therefore been diversifying its oil basket while considering availability and whether particular crude grades suit its refining system.

Why replacing Russian crude is not immediate

The government’s position comes at a time when India remains heavily dependent on imported crude. The country imports more than 88% of its crude oil requirement, while Russia has become one of its largest sources. S&P Global data showed India imported about 1.6 million barrels per day of Russian crude in August, the highest among major buyers that month.

Key factors cited in the debate include:

• Global crude supplies remain under pressure amid disruption in West Asia.
• Russian crude has become an important part of India’s import basket.
• Indian refineries need crude grades that match their technical requirements.
• A sudden replacement of large Russian volumes would require additional supplies from other producers.

US law gives Trump wide tariff powers

The US House of Representatives passed the sanctions legislation by 262-159 before Trump signed it into law. The law authorises tariffs of up to 100% on goods imported from countries identified among the largest buyers of Russian oil or gas. The measure also targets Russia’s energy sector and vessels linked to sanctions evasion.

The legislation does not mean that a 100% tariff automatically applies to every Indian export. It gives the US administration the authority to decide the countries, tariff levels and implementation of the measure. India is currently among the countries exposed to that provision because of its Russian energy purchases.

India weighs energy security against trade risks

The US action creates a direct economic challenge because America is an important market for Indian exporters. Higher US tariffs could affect sectors that depend heavily on access to the American market, while reducing Russian oil purchases could raise India's energy procurement costs.

India has said it will protect its economic interests and energy security. External Affairs Minister S Jaishankar also raised New Delhi’s concerns over the sanctions law during his meeting with US Secretary of State Marco Rubio on the sidelines of the UN General Assembly.

Zelensky urges India and China to cut Russian oil

The issue has also drawn criticism from Ukrainian President Volodymyr Zelensky. In an interview with The Wall Street Journal, he urged India, China and other countries to end energy trade with Russia, arguing that Russian economic activity depends heavily on revenues from these markets.

Zelensky said that if major buyers stopped purchasing Russian energy, Moscow would face greater financial pressure to continue its war in Ukraine. His remarks came shortly after Trump signed the new US sanctions law.

For India, however, the immediate issue remains the uninterrupted supply of affordable crude for its domestic market. Sitharaman said the country would continue buying energy from wherever it is available and suitable, while keeping the interests of its 1.4 billion people and energy security at the centre of its decisions.