As discounts increase, Indian Oil and BPCL begin purchasing Russian oil despite the threat of US tariffs.
According to a Reuters report, Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) have started buying Russian crude again for deliveries in September and October after the discounts increased.
After US President Donald Trump levied an additional 25% tax on Indian goods, increasing the overall levy to 50% starting August 27, to punish the nation for continuing to purchase Russian oil, the refiners had suspended imports in July.
Even while the West works to end the crisis, the US has been pressuring New Delhi to lessen its need for Russian supplies since it sees it as tacit support for Moscow during the fight in Ukraine.
Russian oil is now again appealing due to discounts.
Discounts on Russia’s flagship Urals oil have increased to almost $3 per barrel, according to officials familiar with the situation, which has rekindled interest from Indian refiners, according to Reuters. Competition for the cheaper barrels has increased as a result of China’s increased purchasing.
According to Reuters, which cites sources with knowledge of the situation, the IOC has also reserved several Russian categories, such as Varandey and Siberian Light, in addition to Urals.
India’s rudimentary purchasing strategy is driven by discounts.
Indian refiners usually don’t comment on where they source their oil, according to Reuters. IOC recently informed analysts that it would maintain purchasing Russian oil “depending on economics”, implying that alluring discounts will sustain the flow of purchases.
Amid peace discussions in Ukraine, oil prices remain stable.
However, as investors await the next stage of negotiations to terminate Russia’s invasion of Ukraine, oil prices are trading little altered Wednesday.
At 0405 GMT, Brent crude futures were up 11 cents at $65.90 a barrel. The price of U.S. West Texas Intermediate crude for September delivery, which expires on Wednesday, increased by 5 cents to $62.40 per barrel. The October contract, which was more active, was up 13 cents at $61.90 per barrel.
Moscow has not confirmed its involvement, despite Trump’s attempts to mediate negotiations between Ukrainian President Volodymyr Zelenskiy and Russian President Vladimir Putin. Analysts warn that there is still little chance of a speedy conclusion.
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