IOC buys US crude, defying pressure over Russian oil imports
02 Aug 2025

India's largest oil refiner, Indian Oil Corporation (IOC), has purchased at least five million barrels of crude oil from the US.

This purchase occurred amid pressure from Washington and Europe over its Russian oil purchases.

The deal was struck in addition to another two million barrels sourced from Abu Dhabi, traders familiar with the matter told Bloomberg.

IOC's recent purchases signal shift in strategy
Strategic shift

The recent purchases by IOC have been both large and for relatively immediate delivery, which is unusual for the company.

Earlier this week, state-owned processors were asked to devise plans for buying non-Russian crude oil.

This comes after the European Union and the US criticized India's refiners for buying Russian oil and supporting Moscow amid its war in Ukraine.

Trump threatens tariffs on Russian oil buyers, including India
Tariff threats

US President Donald Trump has threatened to impose secondary tariffs on buyers of Russian oil.

He specifically called out India in a recent post, saying it would face an additional economic penalty for its continued purchases.

Despite the threats, Livia Gallarati, global crude lead at consultant Energy Aspects, believes physical players are unlikely to take the risk of buying Russian barrels at current high prices.

IOC's urgent demand for crude reflected in recent purchases
Diversification

The recent surge in buying activity by IOC is seen as a move to diversify away from Russian crude oil supplies.

Earlier this week, IOC sought crude supplies through multiple back-to-back purchase tenders, which traders said was unusual for the company and indicated an urgent demand for crude.

The company also bought four million barrels of West African crude and the UAE's Murban crude earlier this week.

India is world's biggest buyer of Russian seaborne crude exports
Market position

India has emerged as the world's biggest buyer of Russian seaborne crude exports. The country has ramped up its purchases from almost zero to about one-third of its imports.

This has come at the expense of more traditional supplies from the Middle East and Africa.

Currently, India's refiners can make about $3 a barrel more by buying US supplies instead of Murban for November arrivals.