NEW DELHI: India is about to extend its imports of Russian oil in September, sellers instructed Reuters, as President Donald Trump-led US authorities on Wednesday doubled tariffs on Indian exports to 50%, citing New Delhi’s continued reliance on Moscow’s crude.Regardless of the strain, Indian refiners are anticipated to boost purchases by 10-20% from August ranges, or about 150,000–300,000 barrels per day, Reuters reported, citing preliminary commerce information.Trump had first imposed 25% reciprocal tariffs on August 7, alongside comparable measures on practically 70 nations, however later raised the levy to 50% citing India’s continued purchases of Russian crude.Regardless of the squeeze, India’s authorities has signaled it’s in search of diplomatic options whereas avoiding any sharp lower to grease imports.
India turns to cheaper Russian oil
India has emerged as one of many largest consumers of Russian crude since Western sanctions lower Moscow off from many markets after its 2022 invasion of Ukraine. This shift has helped Indian refiners safe cheaper provides. By mid-2024, India was importing round 1.5-1.6 million barrels per day of Russian oil, assembly practically 40% of its crude wants.Knowledge from Vortexa exhibits imports averaged 1.5 million bpd within the first 20 days of August, unchanged from July however barely under earlier peaksMerchants famous Russia has extra oil out there for export in September as a consequence of refinery outages limiting its home gas manufacturing.“The tariffs are a part of a broader commerce dialogue between India and the US , and given India’s growing refinery runs amid discounted Russian barrels, we don’t see India scuppering its Russian imports in significant volumes,” BNP Paribas famous in a report. Reliance Industries and Nayara Vitality, India’s two largest consumers of Russian oil, have but to touch upon their September plans, the company reported.The extra favorable pricing makes Russian oil particularly engaging to Indian refiners, at the same time as international markets stay risky.
What’s New Delhi’s stand?
India is in search of dialogue to resolve the tariff standoff with Washington, at the same time as Prime Minister Narendra Modi continues diplomatic outreach, together with a gathering with Russian President Vladimir Putin, Reuters reported.US officers have accused New Delhi of “profiteering” from discounted Russian crude, however Indian officers counter that the West itself continues to purchase Russian items price billions.
India prone to proceed shopping for?
Over the previous two years, India’s reliance on discounted Russian crude has come at the price of dearer provides from OPEC, although the cartel’s share of Indian imports noticed a modest rebound in 2024 after an eight-year decline.Russian exporters at the moment are providing September-loading Urals crude at reductions of $2–$3 per barrel to benchmark dated Brent, wider than August’s $1.50 low cost—the narrowest since 2022.“Except India points a transparent coverage directive or commerce economics shift considerably, Russian crude will doubtless stay a core a part of its provide combine,” Sumit Ritolia from Kpler instructed the company.Brokerage CLSA additionally argued there’s solely a “restricted probability” of India halting Russian imports until a worldwide ban is enforced.
What if India stops shopping for Russian oil?
Analysts warning that if India had been to considerably reduce its Russian crude imports, international oil provides might shrink by practically 1 million barrels per day, doubtlessly driving costs near $100 a barrel.Such a transfer would additionally hit Moscow arduous, as India’s demand has develop into essential for sustaining Russia’s export volumes and wartime revenues.CLSA added {that a} sudden halt to India’s purchases might wipe about 1 million barrels per day from international provide, triggering a pointy short-term spike in costs to almost $100 a barrel.
What merchants say?
Market members say the true influence of US tariffs and European sanctions could solely develop into clear with cargoes scheduled to reach in India in October, as these shipments are simply starting to commerce.