Russia is offering India bigger oil discounts, with the price of its Ural grade oil dropping to a discount of $3 to $4 per barrel, as reported by Bloomberg. The price reduction applies to cargoes expected to load in late September and October, reflecting Moscow’s efforts to maintain its oil trade with India amid rising tensions with the US.
India has become a significant importer of Russian crude oil, especially since the start of the Russia-Ukraine war. Despite rising US criticism and increased tariffs, India continues to import Russian oil, which is offered at lower prices compared to alternatives like US crude.
Last week, the US doubled tariffs on India’s imports of Russian oil to 50% as part of efforts to curb the flow of Russian crude, accusing India of fueling the war in Ukraine by purchasing discounted Russian oil. However, India has defended its stance, stating that there are no international sanctions prohibiting the purchase of Russian oil, and the US itself has not imposed a ban on Russian oil.
India’s growing ties with Russia are seen as a geopolitical shift, with India resisting Western pressure while strengthening its relationships with Moscow and Beijing. Prime Minister Narendra Modi has repeatedly emphasized the "special" relationship between Russia and India, further solidifying this alignment during the recent Shanghai Cooperation Organisation (SCO) summit.
The offer of cheaper Russian Urals oil has attracted significant interest from Indian refiners, who have continued to purchase the oil despite temporary pauses in early August. In contrast to US crude, which is priced at a $3 premium, Russian oil remains an attractive option for India due to the deep discounts being offered, even amid the current geopolitical climate.
This ongoing oil trade underscores India’s strategic balancing act in international relations, as it navigates its economic and energy needs while managing its political ties with both Russia and the US. With Russia’s oil discounts set to continue, Indian refiners are expected to remain major players in the global oil market, taking advantage of the cheaper crude to meet domestic demand and export opportunities.
