Russian oil purchases restarted by Indian Oil and BPCL amid looming US tariff threats, as discounts on Russian crude deepen according to a recent report.
In the midst of escalating geopolitical tensions, India has chosen to resume its significant crude oil purchases from Russia, despite the intensified U.S. tariff pressure. The U.S. has imposed an additional 25% tariff on Indian imports linked to Russian oil, effective from August 2025, a move that is perceived as retaliation against India's surging imports of heavily discounted Russian crude.
The discounts on Russia's flagship Urals crude have widened to about $3 per barrel, making it an attractive option for Indian refiners. This revival of interest from Indian refiners underscores the economic attractiveness of the discounted Russian crude, despite potential higher costs from tariffs.
The Indian officials have expressed no expectation of immediate relief or delay in these tariffs and have criticized the U.S. for targeting India while excluding China and Europe from similar measures. The U.S. has been seeking to pressure India to curb its Russian oil imports, viewing it as indirect support for Moscow amid the war in Ukraine.
Meanwhile, the Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) have resumed purchases of Russian crude for September and October deliveries. In addition to Urals, IOC has booked other Russian crude grades, including Varandey and Siberian Light. IOC has stated that its Russian oil purchases are a business decision and that it will continue buying, despite the U.S. 'sanctions'.
The ongoing Russia-Ukraine conflict remains a low-resolution prospect, according to analysts. Meanwhile, China has also stepped up its purchases of discounted Russian crude, adding to the competition for the discounted barrels.
The situation reflects ongoing tensions, with the U.S. seeking to pressure India to curb its Russian oil imports. However, the discounted Russian crude remains attractive for Indian buyers, indicating that India continues to prioritize this supply source amid global energy market dynamics.
It is important to note that the total tariff on Indian goods from the U.S. has risen to 50% due to the additional 25% tariff imposed by President Donald Trump, effective from August 27. Research warns that Trump's 50% tariffs could put $60 billion of Indian exports and millions of jobs at risk.
Moscow has not confirmed its participation in talks brokered by Trump between Putin and Zelenskiy, adding another layer of complexity to the already tense situation.
Oil prices are trading steady amid Ukraine peace talks, with Brent crude at $65.90 and WTI at $62.40 (for September delivery) and $61.90 (for October delivery). Despite the ongoing tensions, the global energy market dynamics continue to play a significant role in shaping crude oil purchases, with India and China vying for discounted Russian crude.
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