The discounts on Russian Urals crude oil for India have narrowed to $1–2 per barrel due to increased demand from Indian refineries amid supply disruptions from the Middle East. Earlier in July, Russian crude was sold in India at a discount of over $10 per barrel.
The discounts on Russian Urals crude oil supplied to India have contracted to $1–2 per barrel compared to the Brent benchmark price this week. Reuters reported this, citing three trading sources, as noted by UNN.
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The sharp reduction in the discount indicates a significant shift in market conditions compared to early July, when Urals cargoes were sold in India at a discount exceeding $10 per barrel due to an oversupply of Middle Eastern crude and weak demand from China.
China and India remain the primary purchasers of Russian oil, with exports redirected from Europe to Asian markets following the imposition of Western sanctions in response to Russia’s full-scale invasion of Ukraine.
According to sources, Indian refineries have ramped up their procurement of Russian crude due to renewed concerns about the reliability of Middle Eastern supplies, following renewed military actions by the U.S. against Iran and further disruptions to tanker traffic through the Strait of Hormuz.
Indian refining companies are purchasing large volumes of Russian crude this year as it has proven to be a stable feedstock.
– stated one of the sources.
The source also emphasized that prices remain highly volatile due to geopolitical tensions impacting global markets.
This week, Chinese refineries also increased their purchases of Russian crude amid supply interruptions from the Middle East. According to trade data and market participant information, India’s crude oil imports from Russia and Latin America surged in the second quarter, while imports from the Middle East declined due to supply constraints through the Strait of Hormuz.
Russian oil continues to hold a significant share in India’s imports due to competitive pricing and supply stability, despite periodic market fluctuations and logistical challenges.