Russian crude exports to India are set to increase in September as producers have cut prices to sell more oil, news agency Reuters reported quoting traders. The development comes as Russian refineries, which are wrecked by Ukrainian drone attacks on energy infrastructure, are unable to process the normal quantities.
India has become the largest buyer of Russian oil replaced by Western sanctions following the Moscow invasion of Ukraine in 2022. This has allowed Indian refiners to capitalize on cheaper crude.
The purchases have been criticized by the Trump administration, which on Wednesday increased U.S. tariffs on Indian imports to 50%.
New Delhi has indicated it is trying to meet Trump's further tariffs through negotiations, with Prime Minister Narendra Modi carrying out a diplomatic visit, including discussions with Russian President Vladimir Putin.
American authorities have blamed India for benefiting from discounted Russian crude, while Indian officials have condemned the West for hypocrisy, citing that the European Union and the U.S. keep purchasing Russian products worth billions of dollars.
India's oil ministry wasn't available to comment on Thursday, Reuters said.
Without India, Russia would struggle to maintain its existing level of exports, which are vital to producing the oil revenues that underpin the Kremlin's budget and its ongoing conflict in Ukraine. Three sources of trading that deal in selling oil to India have reported that Indian refiners are set to increase Russian oil buys in September by 10-20% from August, or 150,000-300,000 barrels per day. The sources, who used preliminary buying data and wished to remain anonymous since they were not allowed to speak publicly, made the report.
The two biggest Russian oil importers in India, Nayara Energy (bulk Russian-held) and Reliance, did not comment immediately, acoording to Reuters.
Russia will have more oil to export next month as planned and unplanned refinery shutdowns have cut its domestic refining capacity for crude to fuel. Within the past few days, Ukraine has attacked 10 Russian refineries, taking out up to 17% of Russia's refining capacity temporarily.
Figures from Vortexa analysts indicate India imported 1.5 million barrels a day of Russian crude in the first 20 days of August, the same as in July but a little short of the 1.6 million bpd average for January to June.
These volumes represent approximately 1.5% of world supply, with India being the largest seaborne Russian crude purchaser, satisfying some 40% of the country's oil needs. China and Turkey are major buyers of Russian crude as well.
India's increasing imports of Russian crude over the past few years have been taken from more expensive supplies from the Organization of the Petroleum Exporting Countries. OPEC's contribution to India's oil supply increased in 2024 after falling for eight years.
Russian exporters offered Urals crude for September loading at discounts of $2-$3 per barrel compared to the Brent benchmark, according to the three traders. This represents a deeper discount than the $1.50 per barrel reduction in August, which had been the narrowest since 2022.
There is a view that if Indian Russian crude imports halted, world supplies might decline by about one million bpd, and they could drive near-term oil prices to almost $100 per barrel.
Traders pointed out that the full impact of tariffs and sanctions is likely to become visible only in cargoes shipped to India in October, which are scheduled to begin trading over the next few days.
Besides American tariffs, the European Union has also strengthened its price cap to restrict Russian oil revenue, which may cause more difficulty in sales later in the year. The EU established the cap at $47.60 per barrel from September 2—15% less than the Russian crude market price—prohibiting access to Western services for shipments sold above it.
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