India's state-owned oil refineries have temporarily stopped buying Russian crude oil since last week. According to industry sources, the main reason behind this is said to be the reduction in the discount offered by Russia and Trump's strictness on buying oil from Russia. According to the report, the discount on oil from Russia has reached the lowest level since the imposition of Western sanctions in 2022.
Oil Importer
India is the world's third-largest oil importer and the largest buyer of Russian crude oil by sea. India's oil exports remain a major revenue source for Russia as the Ukraine war enters its fourth year.
Sources said Indian Oil Corporation, Hindustan Petroleum Corporation, Bharat Petroleum Corporation and Mangalore Refinery Petrochemical Limited did not make any fresh purchases of Russian crude oil in the last week.
Private Companies
According to sources, these government companies usually buy Russian oil on a delivery basis; they have turned to Abu Dhabi's Murban crude and West African oil as an alternative. On the other hand, private companies like Reliance Industries and Nayara Energy, in which the Russian oil company Rosneft has a large stake, buy oil under annual agreements with Moscow and remain the largest buyers.
Discount By Russia
It is worth noting that on July 14, Trump had warned that if Russia does not make a major peace deal with Ukraine, then a 100 per cent tariff will be imposed on countries buying oil from Russia. Sources say that the discount offered by Russia has nosedived to the lowest level since 2022, when Western countries imposed tough sanctions on Russia for the first time. In such a situation, Indian refineries are now withdrawing from Russian crude oil.
International Trade
Refineries fear that the new EU sanctions could disrupt international trade, especially fundraising, even if they are buying oil within the agreed price band. India has already expressed opposition to unilateral sanctions.
