Crude Oil: Russia Rejects Trump’s Claim, Asserts India’s Sovereignty in Energy Trade
MOSCOW – The Kremlin has officially pushed back against recent assertions made by US President Donald Trump, clarifying that India remains entirely free to purchase crude oil from any global supplier it chooses. The statement, issued by Kremlin spokesperson Dmitry Peskov on Wednesday, follows a high-profile claim by the American President that New Delhi had agreed to halt its imports of Russian energy as part of a landmark trade deal.
The diplomatic friction underscores the complexities of the global crude oil market in 2026. While Washington has been aggressively pushing for a decoupling of the New Delhi-Moscow energy axis, the Russian government maintains that its strategic partnership with India is “resilient to external pressure” and based on mutual economic benefit rather than political dictates.
The Spark: Trump’s Truth Social Proclamation
The controversy erupted following a phone call between President Trump and Indian Prime Minister Narendra Modi on February 2, 2026. Shortly after the conversation, Trump announced on Truth Social that a “massive breakthrough” had been reached. According to the President, India agreed to “stop buying Russian crude oil” in exchange for a reduction in US tariffs on Indian goods—dropping from a punitive 50% down to a reciprocal 18%.
Trump further claimed that India would pivot its energy dependency toward the United States and “potentially Venezuela,” framing the move as a decisive blow against Moscow’s ability to fund its ongoing operations in Ukraine. However, while Prime Minister Modi publicly welcomed the tariff reductions, his official statements remained conspicuously silent regarding any commitment to cease crude oil imports from Russia.
Russia’s Response: “Nothing New Here”
Responding to these claims, Dmitry Peskov addressed reporters in Moscow, dismissing the idea that India had undergone a sudden policy shift. He emphasized that Russia has never been India’s sole provider of crude oil and that New Delhi’s strategy of diversifying its energy basket is a long-standing practice.
“We, along with all other international energy experts, are well aware that Russia is not the only supplier of crude oil and petroleum products to India,” Peskov stated. “India has always purchased these products from other countries. Therefore, we see nothing new here.”
The Kremlin spokesperson further confirmed that Moscow has received “no official communication” from the Indian government suggesting an end to their energy cooperation. This sentiment was echoed by Foreign Ministry spokesperson Maria Zakharova, who described the bilateral crude oil trade as a cornerstone of international energy stability.
The Logistics of Substitution: A Refining Reality Check
Energy analysts have been quick to point out the technical hurdles in Trump’s proposed pivot. India’s refineries are specifically calibrated to process various grades of crude oil. Russian Urals, a medium-sour grade, is a staple for many Indian state-run and private refiners like Nayara Energy.
Igor Yushkov, a leading expert at the National Energy Security Fund, noted that American shale oil is predominantly a light-sweet grade.
The Blending Cost: To replace Russian Urals, Indian refiners would need to blend light US crude oil with heavier grades from other sources, incurring significant additional costs.
Volume Constraints: Russia currently exports between 1.5 million and 2 million barrels of crude oil per day to India. Experts argue that the US logistics chain would struggle to consistently match this volume at competitive price points.
Financial Stakes: Tariffs vs. Discounts
The battle for India’s crude oil market is also a battle of balance sheets. In 2025, the Trump administration imposed steep 50% tariffs on Indian goods, citing New Delhi’s continued purchase of Russian energy as a “hostile economic act.” The new trade deal, which lowers these tariffs to 18%, provides a massive boost to the Indian textile, jewelry, and IT sectors.
However, the “discount” India receives on Russian crude oil has historically saved the Indian exchequer billions of dollars. If the cost of switching to American energy exceeds the savings gained from lower tariffs, the Indian government faces a difficult domestic economic choice.
A Shifting Market Landscape
Data from the first few weeks of 2026 suggests that while India is not “stopping” Russian imports, it is indeed diversifying. Imports of Russian crude oil fell to 1.1 million barrels per day in January, down from the 2 million barrels per day seen in mid-2025. This decline is attributed to a mix of narrowing discounts, increased scrutiny of the “shadow fleet” of tankers, and the strategic desire to keep the Washington-New Delhi trade deal alive.
Despite this, Russia remains optimistic. The Kremlin’s stance is clear: as long as the market demands it, Russian crude oil will find its way to Indian shores, regardless of the rhetoric coming from the White House.
Energy Economics: The Cost of Switching from Russian to American Supply
As the geopolitical tug-of-war over crude oil intensifies, the primary concern for Indian refiners is the bottom line. Historically, the deep discounts offered on Russian Urals have provided a significant cushion for India’s economy, helping to manage trade deficits and domestic inflation. However, the new trade agreement with Washington introduces a complex cost-benefit analysis: do the savings from reduced US tariffs outweigh the increased costs of purchasing American crude oil?
The following table compares the pricing and logistical realities of the two major suppliers as of February 2026.
Crude Oil Pricing Comparison (Estimate – Q1 2026)
| Feature | Russian Urals (Medium-Heavy) | US WTI (Light-Sweet) |
| Market Price (per barrel) | $53 – $55 | $64 – $65 |
| Discount to Brent | $10 – $12 | Minimal to None |
| Freight Cost to India | Moderate (via Shadow Fleet) | High (Longer Distance) |
| Refining Compatibility | High (Matches Indian Specs) | Requires Blending / Costly Upgrades |
| Payment Currency | Rupee, Dirham, or Yuan | US Dollar |
| Diplomatic Status | High Risk (US Sanctions) | Preferred (Trade Pact Alignment) |
The $10 Billion Dilemma
Analysts from Kpler and Al Jazeera have noted that a full pivot away from Russian crude oil could increase India’s annual import bill by $9 billion to $11 billion. To put this into perspective, that amount is roughly equivalent to India’s entire federal health budget.
While the reduction in US tariffs from 50% to 18% is a major victory for Indian exporters, the energy sector remains the “Achilles’ heel” of the deal. If Indian refiners are forced to buy more expensive American crude oil, the resulting rise in petrol and diesel prices at home could trigger a surge in domestic inflation, potentially neutralizing the gains made in the export sector.
“The math is precarious,” says a Mumbai-based energy consultant. “India is being asked to trade an immediate, tangible discount on crude oil for the long-term potential of a better trade relationship with Washington. For a price-sensitive market like India, that is a hard sell.”
Strategic Diversification: The Middle Way?
Despite the White House’s claim of a “total halt,” the current data suggests India is pursuing a middle path. By slightly reducing Russian crude oil intake while increasing imports of American and Middle Eastern barrels, New Delhi aims to satisfy Trump’s “America First” energy goals without completely severing ties with its cheapest supplier.
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