New Delhi: Despite pressure from the US, India’s state-run refiners, Indian Oil Corporation Ltd (IOCL) and Bharat Petroleum Corporation Ltd (BPCL), are back to buying Russian oil. They plan to receive these shipments in September and October. This shift comes as discounts on Russian crude widened.
In July, both companies stopped importing Russian oil. The US had raised concerns about India continuing its trade with Russia, even hinting at imposing a 25% tax on Indian goods starting August 27 in retaliation.
Critics argue that India’s oil purchases finance Russia’s military efforts in Ukraine. Recently, White House adviser Peter Navarro claimed in the Financial Times that India acts as a major conduit for Russian oil, converting embargoed supplies into valuable exports and providing Moscow with crucial revenue. However, India dismissed these comments as exaggerated, insisting that their decision to buy Russian crude is economically driven.
Current reports indicate that the discount on Russia’s flagship Urals crude has increased to about $3 per barrel, making it attractive for refiners again. Aside from Urals, IOCL has also purchased other grades like Varandey and Siberian Light.
IOCL has stated its choice to source Russian oil is purely a business decision, emphasizing its reliance on discounted crude. They noted that 22% of their crude supply for 2024-25 will come from Russia, rising to around 24% in FY26. The company also clarified that it hasn’t received any directive from the Government regarding these imports. “We aren’t being told to buy or not to buy,” they explained.
Currently, IOCL is securing Russian crude at a discount of $1.5 per barrel compared to the Dubai benchmark. The company is also planning to invest Rs 34,000 crore in FY26 for expanding refineries in Panipat, Haryana, and Vadodara, Gujarat.
This return to Russian oil has sparked discussions on social media, with many users debating the ethical implications of trade decisions amid geopolitical tensions. Overall, it seems that economic factors are outweighing political pressures in this complex scenario.
For further information, you can refer to the Financial Times for insights on international trade policies and their implications.
