Russian Oil Discounts Tempt India Despite US Pressure

As New Delhi faces continued pressure from Washington to curtail its oil trade with Moscow, Russian crude is becoming even cheaper for Indian buyers. This pressure comes amid accusations from the Trump administration that India's purchases are helping to fund Russia.

Urals Crude: An Attractive Offer for Indian Refineries

Urals crude, Russia's flagship oil product, is shipped from the country's western ports. According to sources familiar with the matter, the landed price of Urals crude has fallen to a discount of $3 to $4 per barrel compared to Brent crude. The sources added that these prices apply to shipments scheduled to depart in late September and October.

India: A Major Importer of Russian Oil Post-Ukraine Conflict

Following the outbreak of the Russia-Ukraine conflict in 2022, India emerged as a major importer of Russian oil. However, this trade has put the South Asian nation in the crosshairs of the US, with threats of significant economic penalties. These threats, along with repeated criticisms from US officials, have solidified ties between New Delhi and Moscow.

Indian Reactions to US Criticism

Indian Prime Minister Narendra Modi has previously stated that his country has a 'special' relationship with Russia. Directly responding to criticism, Indian Oil Minister Hardeep Singh Puri defended the continued flow of Russian oil, arguing that it helps protect the global economy from price spikes.

Continued Flow of Russian Oil to India

Despite a brief pause in early August, Indian refiners have continued to receive Russian oil. With Urals crude prices remaining low, demand is expected to remain strong. Last week, Urals crude was offered at a discount of $2.50 per barrel, compared to a discount of just $1 in July. In comparison, some refiners recently purchased US crude at a premium of around $3 per barrel.

Volume of Russian Imports to India

Data from Kpler and reports from port agents indicate that Indian state-run and private processors received 11.4 million barrels of Russian oil from August 27 to September 1. This included a cargo from a US-sanctioned tanker, the 'Victor Konetsky', which was transferred via a ship-to-ship operation.