Kolkata: With the US apex court removing the very foundation of Donald Trump’s whimsical tariffs, and thereby throwing open the India-US trade deal which was in the works, Indian refiners are ready to setp up purchases of Russian crude, reports have stated. In the absence of the court verdict the India US trade deal had, as a precondition, that New Delhi will stop buying Russian crude, which Trump alleged was a means to fund Moscow’s aggression in Ukraine.
Reports have stated that crude oil refiners are not booking tankers as they want clarifications from the Indian government on the future course of procuring crude from Russia. Over the past few months Indian refiners have been buying less and less of crude from Russian producers after sustained pressure from Washington. Indian refiners appeared hopeful that the trashed tariffs will pave the way for resuming imports from Russia.
Russian crude waiting to be picked up, discounts even deeper
India’s decision to progressively move way from buying from Russia has left huge amounts of crude stored in tankers at sea. China, however, is buying them. Reports say that discounts for Russia’s Urals grade crude have now reached a very high $15-20 a barrel as compared to the Brent. The discounts at the beginning of this months was about $10.
Over the past few weeks, public sector refiners such as IOC and BPCL were purchasing crude from West Asian countries. They have also floated tenders for April and May. Significantly, the decision to purchase more crude from West Asian sources will mean a two fold implication — one, the prices will be far higher than Russian crude and given the rising tension in the region, thanks to teh standoff between the US and Iran, the deliveries could be delayed and also in physical peril.
Russian imports this month
In Feb Indian refiners could end up importing about 1.2 million barrels a day on average from Russian suppliers. This will be the lowest level since November 2022, according to data by Kpler. The forecasts is the procurements from that country are set to dip in March to the level of 0.8-1 million barrels a day. Other forecasters indicate that purchase from Russia can go down even higher. Incidentally, though Donald Trump has been putting pressure on India to desist from buying Russia on social media, New Delhi has not confronted that stand publicly except saying that India is free to decide the course of her energy policy to suit her best interests.
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