India-based refiners Indian Oil and Bharat Petroleum have resumed their purchases of Russian oil for delivery in September and October, with widening discounts in place, as reported by Reuters, citing two officials familiar with the matter.
This move could potentially impact the supply to key China buyers, which had increased its intake during the Indian refiners’ hiatus.
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However, with discounts on Russian flagship Urals crude reaching approximately $3 per barrel, the economics have swung back in favour of the Indian companies.
Despite geopolitical tensions and previous criticism from the US, Russia anticipates maintaining its oil exports to India.
Officials at the Russian embassy in New Delhi have expressed hope for upcoming trilateral discussions involving India and China.
The decision to restart imports follows a temporary halt in July when Indian refiners faced slimmer discounts and international scrutiny.
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By GlobalDataThe US criticised India’s continued purchases of Russian oil, which have surged from a marginal 0.2% to 35% of India’s total oil imports since the Ukraine conflict began.
Furthermore, US President Donald Trump had threatened to impose a 25% tariff on Indian goods from 27 August to penalise the country for its dealings with Russia.
Despite the geopolitical backdrop, Indian Oil, the nation’s key refiner, communicated to analysts its intent to continue sourcing Russian oil, based on favourable economics.
The company’s strategy includes diversifying its crude basket with other Russian grades such as Varandey and Siberian Light.
While Indian companies typically do not disclose details of their crude imports, the market has taken note of China’s recent acquisition of 15 cargoes of Russian oil for delivery in October and November.
