Despite continued pressure from the United States over crude supply from Russia, Indian state refiners have returned to the spot market for purchases of Russian oil, company officials familiar with the matter told Reuters on Wednesday, as discounts for Moscow’s crude grades deepened.
Indian Oil Corporation Limited (IndianOil) and Bharat Petroleum Corporation Ltd (BPCL) have bought Russian Urals and other crudes for September and October delivery, as the discounts for Urals widened to $3 per barrel, the officials said.
A few weeks ago, the biggest Indian state-owned refiners, including IndianOil and BPCL, pulled out of spot purchases of Russian crude for cargoes loading in October, after the U.S. announced an additional 25% tariff on India over its imports of crude from Russia.
U.S. President Donald Trump signed an executive order enacting an additional 25% tariff on Indian goods, explicitly targeting India’s ongoing imports of Russian crude oil. The overall 50% tariff on Indian goods will take effect on August 27.
However, discounts for Urals have widened in recent days as China cannot absorb all the Urals cargoes, which are being shipped from Russia’s western ports on the Baltic Sea and the Black Sea.
Reports emerged last week that India’s state refiners had started to inquire traders about potential purchases of the flagship Russian crude Urals to take advantage of the falling prices for Russia’s crude.
IndianOil said at an earnings call earlier this week that it continues to buy Russian crude, “depending upon the economics.”
China is now scooping up some of the Urals volumes, but it cannot absorb all the cargoes that previously went to India.
At the same time, the U.S. and India are locked in difficult trade negotiations and the U.S. has increased pressure on India for its Russian oil imports.
“India’s dependence on Russian crude is opportunistic and deeply corrosive of the world’s efforts to isolate Putin’s war economy,” the White House trade adviser Peter Navarro wrote in an op-ed published in the Financial Times on Monday.
By Tsvetana Paraskova for Oilprice.com
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