Though the Kremlin has officially issued a rather nonchalant reaction to reports about India’s cutting down its oil, stating New Delhi remains free to buy crude from any supplier, reports hint that it is pulling every card to keep India on its side.
Russia has reportedly increased oil discounts for Indian refineries in a bid to encourage India to purchase oil despite its trade agreement with the United States.
The discounts offered to Indian refiners have widened over the last 10 days, with Russia’s flagship Urals grade being offered at more than $10 a barrel below Brent, inclusive of shipping and other costs, traders involved in the purchases, according to Bloomberg.
The report, quoting analytics firm Argus, estimates the discount at approximately $11 per barrel; this figure stood at $9.15 before January 22. The current discount is also at least three times higher than the level traders were discussing before the US imposed sanctions on Rosneft and Lukoil.
India, traditionally not a major buyer of Russian oil, turned to the producer after Russia's full-scale invasion of Ukraine in early 2022 – thanks to discounts . Purchases have decreased in recent months, but still averaged around 1.2 million barrels per day in January, according to Kpler, down from a peak of 2 million barrels per day.
According to data intelligence firm Kpler, India is “unlikely to fully disengage” from Russian oil in the near term, which added that the imports would stabilise in the 1.1 million to 1.3 million barrels a day range through the first quarter and early into the next. Kpler put Urals discounts at around $9 a barrel to ICE Brent to India, some $4 to $5 cheaper than Venezuelan barrels.
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‘Don't trust Trump’s words
Prime Minister Narendra Modi has not abandoned Russian oil, despite US President Donald Trump's claims to the contrary, and intends to raise the issue of settlements with Russia in national currencies at the 2026 BRICS summit, according to financial analyst and head of the Indian Business Alliance office, Neeraj Shah.
In an interview with Russian media URA.RU, Shah said India has already turned down the US, which asked our prime minister not to buy Russian oil [in exchange for American and Venezuelan]. “I regularly communicate with Indian politicians, so I know what I'm talking about. You shouldn't trust Trump's words. And I won't even speculate on why he said that. He says a lot of things. We are confident that he will reduce tariffs to 18%, because Narendra Modi has already said so,” he said.