Amid Rising US Heat, Russia Offers India Bigger Oil Discounts: Report

The price of Russian oil has dropped to a discount of $3 to $4 per barrel for India, as New Delhi still bears the brunt of US tariffs. According to a Bloomberg report, the price of Russia's Ural grade is being offered at a lower price for cargoes that will load in late September and October.

The Trump administration last week doubled India's tariffs to 50 per cent to punish it for buying Russian oil and fuelling the Ukraine war. New Delhi, in 2022, had become a major importer of Russian crude at the start of the Russia-Ukraine war. Now, after repeated criticism from Washington, India finds itself closer to Moscow and Beijing, in a defiant show of ties.

Even at the Shanghai Cooperation Organisation summit in China, Prime Minister Narendra Modi said that Russia and India share a "special" relationship. In a similar vein he also met Chinese President Xi Jinping, and the two countries pledged to be partners, not rivals.

White House advisor Peter Navarro had launched a scathing criticism of India by saying, "Before Putin invaded Ukraine, India didn't buy Russian oil to speak of- very, very small amounts. What happened? Now, Russian refiners provide discounts, India refines it, and then sells it at a premium to Europe, Africa and Asia. It fuels the Russian war machine."

India has pushed back saying that there are no sanctions that prohibit oil purchase and that the US itself has not banned Russian oil.

Despite a brief pause in purchase in early August, Indian refiners have continued to take Russian oil. Moreover, the cheap Urals are likely to attract purchasing interest as last week, it was being offered at a discount of $2.50 a barrel, more than July's discount of $1.

In contrast, US crude bought by refiners, were priced at around a $3 premium.

Ural is Russia's flagship oil that gets shipped from the western ports.