Russia's Urals crude oil has become $3-4 per barrel cheaper for India compared to Brent crude. Indian refineries are purchasing Russian oil despite US tariffs. Purchases were temporarily halted in August, but oil is again available at attractive prices in September-October, which has also impacted global oil prices.
Urals Crude Oil: India has become a major buyer of Russian oil, particularly Urals crude, which is now available at $3-4 per barrel cheaper than Brent crude. Indian refineries are buying Russian oil despite US tariffs. Purchases were temporarily stopped in early August, but it has become attractive again. In July, this discount was $1, while last week it was $2.50 per barrel. From August 27 to September 1, India purchased 1.14 crore barrels of Russian oil, with some tankers arriving via ship-to-ship transfers.
Special Relationship Between India and Russia
At the Shanghai Cooperation Organisation summit held in China, Prime Minister Narendra Modi stated that the relationship between India and Russia is special. During this summit, he also met with Chinese President Xi Jinping and resolved to strengthen mutual relations. Meanwhile, US White House advisor Peter Navarro criticized India's oil purchases from Russia. In response, India's Petroleum Minister Hardeep Singh Puri stated that the procurement of Russian oil has helped prevent a rise in global oil prices.
Urals Oil $2.50 Cheaper Than Brent
Indian refineries are regularly purchasing Russian oil. Purchases were temporarily halted in early August. However, the cheaper price of Urals crude has made it attractive once again. Last week, this oil was $2.50 per barrel cheaper compared to Brent crude. In July, this discount was only $1 per barrel. On the other hand, some refineries purchased US oil at a premium price, which was $3 per barrel higher.
Shipments and Supply Chain
Between August 27 and September 1, Indian refineries purchased approximately 1.14 crore barrels of Russian oil. One cargo arrived via ship-to-ship transfer from the US-sanctioned vessel Victor Konetsky. Urals oil is Russia's primary crude, shipped from its western ports to India and other countries.
China and Russia's Oil Trade
China is Russia's largest oil buyer. China purchases Urals oil primarily through pipelines and tankers. Russia's strategy is aimed at maintaining stability in the global oil market and strengthening trade relations with various countries.
Changes in the Global Oil Market
Cheaper Russian oil is helping India reduce energy costs and make refinery operations more profitable. This provides India with an opportunity to navigate the volatility of the global oil market. Additionally, India has maintained its energy security interests despite US tariffs and sanctions.
Russia's cheaper Urals crude is also drawing attention in the global oil market. Due to its lower price compared to Brent crude and US crude, it has become an attractive option for various countries. This has provided India with flexibility in its oil procurement.
