India remains cautious on contracted Russian oil as new US sanctions bite

India’s state-run oil refiners are shying away from contracted Russian crude supply as the once-booming trade becomes much harder under tighter enforcement of US sanctions.

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The biggest state-owned refiner Indian Oil Corp. will likely reduce the amount of crude received under so-called term supply, while Bharat Petroleum Corp. and Hindustan Petroleum Corp. have decided against making firm commitments to take contracted oil next financial year, six people familiar with the matter said, asking not to identified because the information is private.

The three refiners had been in talks with Russia’s Rosneft PJSC to secure about 500,000 barrels a day — equivalent to a third of India’s daily imports — to try and reduce reliance on one-off purchases that can often be more expensive. The lukewarm response to a suggested contract clause that would address supply disruptions added to the caution from Indian refiners, the people said.