The discount of Russia’s flagship Urals crude blend for Indian buyers has widened to between $3 and $4 per barrel for Indian barrels amid continued pressure on the latter coming from the United States.
At the time of writing, Urals crude was trading at $62.89 per barrel, compared with $68.45 per barrel of Brent crude. However, over the last month, Urals has been trading within a range of between $61 and $65 per barrel, which makes it hard to put forward a solid argument that the discount has widened in the past few days—in mid-August, for example, Urals dropped to just over $61 per barrel, while Brent crude was trading at close to $67 per barrel, making the discount some $6 per barrel.
Citing unnamed sources, Bloomberg said that the $3-4 per barrel discount was for cargos contracted for delivery this month and next. The sources said that last week, cargoes were being contracted at a discount of $2.50 per barrel, while in July, the discount shrank to some $1 per barrel.
U.S. President Donald Trump started a pressure campaign against India for its substantial imports of Russian crude last month, saying that if these imports stopped, Russia would have motivation to put an end to fighting in Ukraine. As a means of pushing India in the desired direction, Trump threatened an additional 25% tariff on Indian imports to the U.S. unless the country stopped buying Russian oil.
India did not stop buying Russian oil, so Trump went through with the threat, slapping a total tariff of 50% on Indian imports effective August 27. Still, Russia has remained India’s largest single supplier of crude oil, accounting for over 31% of total oil imports in July. India’s second-largest supplier, Iraq, had a share of some 17% of the total, and Saudi Arabia, at number three, accounted for just above 16% of total imports in July.
By Irina Slav for Oilprice.com
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