India's Nayara Refinery Sends Gasoline Back to Russia as Commerce Minister Goyal Heads to Washington on Tariff Deadline

Since the Senate passed its version of Russia sanctions legislation 86-11 and the House followed with the bill that became law last month, the question hanging over India has been simple: will Washington actually pull the trigger on 100% tariffs, and can India afford to keep buying Russian crude if it does. Commerce Minister Piyush Goyal departed for a seven-day trip to the United States on Tuesday, September 29, to meet his US counterpart and push toward an interim trade agreement. The timing puts him in Washington just as new data shows how deep India's Russian oil relationship has gotten.

According to the Centre for Research on Energy and Clean Air (CREA), Russia imported a record 172,000 tonnes of refined oil products in August 2026, more than seven times the previous monthly high recorded since the full-scale invasion of Ukraine and three times the total volume Russia imported in all of 2025. India supplied 70% of that, and 94% of Russia's gasoline imports specifically, CREA found.

All of it, CREA reported, was loaded at the Vadinar refinery in Gujarat, run by Nayara Energy, in which Russia's Rosneft holds a 49.13% stake. Nayara is itself under EU sanctions. Vadinar sourced 100% of its crude from Russia in the first eight months of 2026, up from 81% across all of 2025, per CREA. Russian crude arrives in India, gets refined into gasoline at a Rosneft-linked plant, and gets shipped straight back to Russia, which can no longer make enough of its own fuel after Ukrainian drone strikes hit its refineries.

The logistics involve sanctioned tankers, with ship-to-ship transfers at the Damietta Lightering Zone off Egypt before unloading at Russia's Arctic port of Beloe More. Four of the six vessels involved had flown a false flag at some point in the prior two years, CREA reported. India Today's open-source tracking team traced the same shipping trail independently and reached the same numbers.

The law Trump is holding

The leverage Washington has is the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, signed into law last month after clearing Congress. The law gives President Trump authority to impose tariffs of up to 100% on countries that buy large volumes of Russian oil and gas, and the House version explicitly names India and China as potential targets.

India has responded through diplomatic channels rather than public confrontation. New Delhi has raised the issue at a high level with US officials, warning that tariffs over Russian oil purchases could damage not just bilateral relations but the global energy market itself.

Why India isn't budging

Russian crude accounts for nearly half of India's total oil imports in recent months, and July 2026 set a new record for those purchases. India is unlikely to walk away from that supply regardless of the tariff threat.

Prena Gandhi, an associate fellow at the Vivekananda International Foundation, told Nikkei Asia that rapidly replacing Russian crude would raise India's import costs and fuel domestic inflation, especially with Brent crude already trading above $100 a barrel amid Middle East supply disruptions. Gandhi also argued the US itself may be reluctant to force millions of barrels of Russian crude off the market while American gasoline prices climb outside peak season and diesel sits at record levels. She said India could instead seek exemptions or waivers under the new law.

The strongest case against Trump following through on the full 100% tariff is that doing so could shrink global crude supply at the worst possible moment, since the Strait of Hormuz disruptions from the US-Iran war have already tightened the market, with alternative suppliers like Saudi Arabia, Iraq, the UAE, and Brazil struggling to fill the gap fast enough.

The opposing case is straightforward. Every barrel of Russian crude, and now every tanker of Nayara-refined gasoline sent back to Russia, generates revenue for Moscow's war effort. CREA's broader analysis argues that the G7 price cap policy has largely failed, noting Urals crude has only briefly dipped below the cap and ESPO-grade crude has consistently traded above it due to Chinese demand. CREA is recommending sanctioning countries impose a tax on Western maritime services used to ship Russian oil, rather than trying to cap prices directly.

Goyal said before departing that the India-US trade pact is "done and dusted" pending a level playing field on tariffs. Indian goods currently face an additional 10% duty under a Section 301 probe. Whether that duty stays at 10% or jumps toward 100% now rests on conversations happening in Washington this week, with no public timeline yet for when Trump will decide whether to invoke the new law against India specifically.