India’s state-run refiners, Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL), have reportedly restarted purchases of Russian crude oil for September and October cargoes after a temporary pause.
Citing two officials familiar with the matter, Reuters reported that the decision comes as discounts on Russian grades widened, making them more attractive once again.
Discounts Spark Renewed Interest
The refiners had halted imports in July after discounts narrowed and New Delhi faced criticism from Washington over its continued reliance on Russian energy. The pressure intensified when US President Donald Trump threatened to impose a 25 per cent tariff on Indian goods starting August 27 as a penalty for such purchases. However, with discounts on Russia’s flagship Urals crude now widening to around $3 per barrel, Indian refiners have resumed buying. Citing industry sources, the news agency reported that in addition to Urals, IOC has also purchased other Russian grades, including Varandey and Siberian Light.
While Indian refiners returned to the market, China had stepped up its buying in their absence. Analysts suggest that the resumption of Indian imports could now tighten supplies for Beijing, which recently purchased around 15 cargoes for October and November delivery.
India’s Stand on Russian Oil
Although Indian companies generally refrain from commenting publicly on their crude imports, IOC signalled earlier this week that it would continue sourcing Russian oil whenever the economics proved favourable.
Crude Prices Edge Higher
Meanwhile, global oil benchmarks inched up on Wednesday amid renewed concerns over potential supply disruptions. The rebound followed a more than 1 per cent decline in both benchmarks the previous day, when optimism over peace efforts in Ukraine had briefly raised hopes of sanctions relief and greater Russian exports.
Uncertainty Over Ukraine Peace Talks
Despite speculation of negotiations, prospects of an imminent resolution remain doubtful. On Tuesday, President Trump suggested that Washington might provide air support as part of a potential peace deal and confirmed he was facilitating a meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy. He also floated the idea of broader discussions involving Hungary’s Prime Minister Viktor Orban. However, Moscow has yet to confirm its participation.
The continuing uncertainty over the Ukraine conflict is expected to keep oil markets on edge, even as countries like India manoeuvre through complex geopolitical dynamics to secure their energy needs.
