[Wen/Observer Network Liu Bai] As soon as the additional 25% tariff imposed by the U.S. government on India came into effect, it was reported that India planned to increase its purchase of Russian oil.
Three traders involved in oil sales to India have revealed that India plans to increase Russian oil imports in September, despite US objections. According to reports, Russia has had to cut prices to sell more oil because the Ukrainian attack damaged Russian refinery capacity.
Reuters reported on August 28 that the above-mentioned traders said that judging from preliminary procurement data, Russian oil purchases from Indian refineries in September will increase by 10%-20% compared with August, that is, an increase of 150,000-300,000 per day. barrels.
India's two largest buyers of Russian oil, Reliance Industries and Nayara Energy, did not immediately respond to requests for comment. India's oil department also had no comment.
Russia has more oil available for export next month as planned or unexpected shutdowns weaken refinery processing capacity. Ukraine recently claimed to have attacked 10 Russian refineries, weakening 17% of Russia's refining capacity.
According to data from Vortexa analysis company, in the first 20 days of August, India imported an average of 1.5 million barrels of Russian oil per day, the same as in July, but slightly lower than the average daily level of 1.6 million barrels in the first half of the year.
This import accounts for about 1.5 percent of the global oil supply, making India the largest buyer of Russian marine oil, which meets about 40 percent of India’s oil demand.
India has increased Russian oil imports in recent years, replacing more expensive OPEC oil. OPEC's share recovered slightly in 2024 after eight consecutive years of declines.
Three traders said that the Russian Ural crude oil ship in September sold at a discount of $2 to $3 per barrel compared to the benchmark Brent crude.
Dealers said the discount level was higher than the $1.50 per barrel discount in August-the smallest discount since 2022.
Sumit Rietolia, an analyst at Kpler’s European energy market analysis platform, said: “Until India introduces clear policy directives or a major change in the trade and economic situation, Russian oil is likely to remain a core component of India’s oil supply structure.”
The Lyon Securities Authority (CLSA) also predicted in a report that “the possibility that India will stop importing Russian oil unless a global ban is enforced is limited.”
The report also points out that if India stops importing Russian crude oil, the chain reaction could lead to a global supply reduction of about 1 million barrels per day, and trigger a short-term global oil price surge to $100 per barrel.
Traders said the full impact of the sanctions and tariffs may not be apparent until goods arrive in India in October, which will begin trading in the coming days.
In addition to U.S. tariff initiatives, the EU has also tightened the price ceiling aimed at limiting Russian oil revenue.The EU has set a price ceiling of $47.60 per barrel as of September 2, which is 15% lower than the price of the Russian crude oil market; if the price of crude oil is sold above that ceiling, the relevant goods will not be able to use Western services.
U.S. President Donald Trump has signed an executive order to raise tariffs on Indian goods to 50 percent on the basis of India's continued purchase of Russian oil.
On the eve of the new tariffs coming into effect, Indian Prime Minister Modi made a tough statement, saying that no matter how much pressure he faced, the Indian government he led would protect the interests of farmers and small entrepreneurs.
However, Bloomberg News reported on the 26th, citing a number of people familiar with the matter, that while making a tough statement, India also plans to cut Russian oil imports to meet the requirements of the United States. According to people familiar with the matter, this is a "modest concession" by India to the United States, but it also shows that the country has no plans to cut ties with Russia.
India's Foreign Minister Sujetin said on Monday that despite the very tense situation, trade talks between India and the United States are still ongoing, "communication has not been cut off, people are talking to each other, and we will see what the prospects are."
Analysts at Capital Economics believe that if the high US tariffs on India take effect and continue, it will hit India's economic growth by 0.8 percentage points this year and next, and "the long-term impact may be more severe because high tariffs may reduce the attractiveness of Indian manufacturing."