Despite US tariff pressure, Indian Oil (IOCL) has stated that it will continue to purchase oil from Russia. The company's decision will depend on economic benefits. In the first quarter of fiscal year 2026, Russian oil accounted for 24% of its total imports. The company has also created a capex plan of ₹34,000 crore.
Crude oil: Amidst warnings from the US and the threat of a 50% tariff, Indian Oil Corporation (IOCL) clarified on Monday that it will continue to purchase oil from Russia. The company reported that Russian oil accounted for 24% of its imports in the first quarter of fiscal year 2026, compared to 22% in FY25. IOCL has also announced a capital expenditure of ₹34,000 crore, which includes refinery expansions, petrochemicals, and gas distribution projects.
US Warning Ineffective, Purchases from Russia Continue
The US has announced tariffs of up to 50 percent on India if it continues to buy oil from Russia. In addition, Washington has already warned of an additional 25 percent tariff. Despite these warnings, IOCL has stated that it will continue to import Russian oil in the current quarter. The company says it will buy from wherever it gets cheaper oil.
How Much Was Imported in the Quarter
IOCL stated during an analyst call that in fiscal year 2025, the company sourced approximately 22 percent of its total imports from Russia. In the first quarter of fiscal year 2026, this share increased to 24 percent. The company said that it will continue to buy oil from Russia in the current quarter as well, considering the financial situation.
Why is Import from Russia Increasing?
The biggest reason for buying oil from Russia is its price. Russian crude oil is available to India at a cheaper rate than from other countries in the international market. In such a situation, this deal is economically beneficial for India. This is the reason why Indian companies are not backing away from importing from Russia, despite US pressure and the fear of tariffs.
Increase in Refining Capacity
The company is increasing its refining capacity through several projects. The capacity of the Panipat Refinery is being increased from 15 million metric tonnes per annum to 25 MMTPA. Work on this project will start by the end of this year.
In addition, the capacity of Gujarat's Koyali Refinery will also be increased from 13.7 MMTPA to 18 MMTPA.
Expansion of Barauni Refinery in Bihar
IOCL is also upgrading the Barauni Refinery in Bihar. The existing capacity is 6 MMTPA, which will be increased to 9 MMTPA. This expansion is expected to be completed by August 2026. However, due to increasing costs, the total cost of this project has been increased from ₹13,779 crore to ₹16,724 crore. The company's board has also approved this.
Impact of US Tariffs
The US has clearly warned that if India continues to buy oil from Russia, additional tariffs will be imposed on it. Currently, a tariff of up to 50 percent has been announced on India. This move could affect India-US trade relations. However, India says it will make decisions based on its energy needs.
