New Delhi: India’s state-run oil refiners are bracing for higher crude procurement costs and tighter availability as they prepare to buy oil for delivery after September amid the prospect of steep tariffs by the US on countries importing Russian crude, two people aware of the development said.
“State-owned refiners have supplies tied up for the next 50 days, so an impact of the bill is not expected immediately,” an executive with a refiner said, requesting anonymity. “Tenders are likely to be floated around mid-August for supplies beyond September. That, however, needs to be seen as to what is the availability and also the pricing.”
The concern follows the US Senate’s passage of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 on Friday, which will be taken up in the House of Representatives next month after the Congress returns from its summer recess.
The Act empowers the US president to impose of up to 100% on countries that are among the top five importers of Russian oil and gas, including China and India, which is the world’s third-largest oil importer and fourth-largest refiner. Russian crude accounts for about 48% of imports by India’s state-run refiners.
India may fall back on West Asian crude if Russian oil is sanctioned, but the cost of barrels coming in through the Suez Canal would be higher because the route is longer, while elevated insurance premiums are also affecting shipments on routes outside the Strait of Hormuz amid the ongoing West Asia conflict.
A second person aware of developments said expensive spot purchases already account for 85% of India’s crude imports due to the supply constraints. “Supplies would be somehow secured as oil from Venezuela, the US, UAE and Oman are expected to come in, but pricing will be the key concern.”
Another official said the refiners’ top priority is to ensure availability of energy for consumers at affordable prices, and they will continue to look at commercially viable options.
India’s oil import bill has already surged 60% year-on-year to nearly $49.8 billion in the April-June quarter, even as import volumes fell to around 60 million tonnes from 62.6 million tonnes a year ago, suggesting that higher prices rather than demand were the main driver of the increase.
With India importing nearly 90% of its crude oil requirement, every $1 a barrel increase in crude prices adds about ₹18,000 crore to its annual import bill, underscoring the stakes for the world’s third-largest oil importer. Brent crude was trading above $80 a barrel on Friday, leaving refiners facing a relatively high price base even before any supply shock from sanctions.
Queries emailed to the Union ministry of petroleum and natural gas and the state-run refiners remained unanswered till press time.
Anisur Rahman, professor at the centre for West Asia studies at Jamia Millia Islamia University, said India’s purchases of Russian crude might fall if the sanctions are implemented.
“If India is compelled to reduce Russian oil purchases, it will have to buy oil from other countries at a higher price. However, because of India’s diversified energy portfolio, it has some degrees of freedom,” he said, adding that India should use diplomatic channels while seeking supplies from alternative sources.
Sumit Ritolia, senior manager for modelling at commodities and maritime tracking firm Kpler, said the Senate vote increased policy risk around Russian crude flows. However, it did not alter Kpler’s near-term outlook for Indian or Chinese purchases as the US measures still faced legislative and administrative hurdles, and the eventual impact would depend on how aggressively the US administration chooses to implement them, including the use of exemptions or waivers.
India is particularly exposed because of its growing reliance on n barrels, Ritolia said. Russian crude has become an important supply hedge for Indian refiners, reducing their exposure to disruptions along traditional West Asian supply routes.
“Replacing Russian crude at current volumes would be challenging or impossible,” he said, adding that a rapid curtailment of Russian flows to India or Asia could tighten global oil balances and push prices higher.
For India, that could mean higher costs, a potentially wider current-account deficit and greater pressure on energy security, Ritolia said.
“The issue therefore is not simply whether Russian barrels can be redirected to other buyers, but whether enough alternative crude is available to replace them without tightening the global market further,” Ritolia added.