Major Refiners Resume Purchases as Prices Drop
India’s biggest oil companies have quietly started buying Russian crude oil again for September deliveries. Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL) made the move after Russian oil became cheaper, according to company sources.
The two state-owned refiners had stopped buying Russian oil in July when the price discounts got smaller. But now, Russian Urals crude is being offered at about $3 per barrel discount, making it attractive again for Indian buyers.
Why Indian Companies Stopped and Started Again
The Indian refiners took a break from Russian oil purchases in July for two main reasons. First, the discounts weren’t as good as before. Second, the US government criticized India for buying Russian oil.
President Donald Trump even threatened to put an extra 25% tax on Indian goods starting August 27. This was meant to punish India for continuing to buy oil from Russia.
But the economics were too good to ignore. When Russian oil discounts widened to $3 per barrel, Indian companies decided the savings were worth it.
China Steps Up While India Was Away
During India’s two-month break from Russian oil, China increased its purchases. Chinese refineries bought 15 shipments of Russian oil for October and November delivery.
Now that Indian companies are back in the market, there might be less Russian oil available for China. This could create more competition between the two Asian giants for discounted Russian crude.
What Oil Types Are Indian Companies Buying
Besides the main Russian Urals crude, Indian Oil has also purchased other Russian oil types. These include Varandey and Siberian Light crude varieties.
Indian companies typically don’t talk publicly about their oil purchases. However, IOC told analysts on Monday that it would keep buying Russian oil “depending on economics”.
Russia’s Share in India’s Oil Needs
Russian oil has become a major part of India’s energy supply. Russia now provides about 36% of India’s oil needs, compared to almost nothing (0.2%) before the Ukraine conflict started.
IOC revealed that 22% of its crude oil in the 2024-25 financial year came from Russia. In the current period, this share has grown to around 24%.
US Continues Pressure Campaign
The US government says India’s Russian oil purchases help fund Russia’s war in Ukraine. American officials argue that India acts like a “global clearinghouse” for Russian oil, turning it into refined products for export.
Despite the pressure, a Russian embassy official in New Delhi said Moscow would continue supplying oil to India. The official mentioned that Russia has a “very special mechanism” to ensure uninterrupted oil supply to India.
