Veriton Investment

Russian Oil Gets Cheaper for India as US Amps Up Criticism

(Bloomberg) --

Russian crude is getting even cheaper for India buyers as New Delhi faces sustained US pressure to cut its oil trade with Moscow, which the Trump administration says is helping fund the war in Ukraine.

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The price of Urals crude has dipped to a discount of $3 to $4 a barrel to Brent on a delivered basis, according to people who received offers for the Russian grade, asking not to be identified discussing sensitive information. The price is for cargoes that will load in late September and October, they added.

India became a major importer of Russian crude after the start of the war in Ukraine in 2022, but the South Asian nation was recently slapped with crushing US tariffs for the trade. Those economic penalties and repeated criticism from President Donald Trump and his officials has pushed New Delhi closer to longtime rival China and led to a defiant show of ties with Moscow.

At the Shanghai Cooperation Organization summit in China this week, Indian Prime Minister Narendra Modi said his country and Russia share a “special” relationship. He also met Chinese President Xi Jinping and the two leaders pledged to be partners rather rivals, announcing steps to rebuild ties.

Some of the most scathing criticism directed at India has been from White House adviser Peter Navarro. On Monday, Oil Minister Hardeep Puri directly challenged his blunt language and argued that Russian flows had helped to shield the global economy from a price spike. Puri made the remarks in a column in The Hindu newspaper.

Indian refiners have continued to take Russian oil, despite a brief pause in early August, and cheaper Urals are likely to attract strong buying interest. Last week, the grade was being offered at a discount of around $2.50 a barrel, wider than $1 in July, the people said. That compares with US crude recently bought by some refiners, which was priced at around a $3 premium, they added.

State-run and private processors have received 11.4 million barrels of Russian crude from Aug. 27 to Sept. 1, according to data from Kpler and reports from port agents. One cargo originated from a US-sanctioned vessel called the Victor Konetsky via a ship-to-ship transfer.

Urals is Russia’s flagship oil and ships from the nation’s western ports. China, which hasn’t faced the same condemnation as India, is the biggest importer of Moscow’s crude, which arrives via pipeline and tankers.

--With assistance from Weilun Soon.

(Updates throughout.)