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New Delhi: Notwithstanding the penalty tariffs imposed by US President Donald Trump on India for importing "discounted" Russian crude oil, New Delhi is preparing to further increase its purchases.
The move comes amid growing tensions between Washington and New Delhi over energy trade. Trump has accused India of profiteering from cheap Russian crude and indirectly funding President Vladimir Putin's war in Ukraine.
According to a Reuters report, Indian refiners plan to boost Russian oil imports in September by 10–20 per cent from August levels -- 150,000-300,000 barrels per day. India imported 1.5 million bpd in August, which accounted for about 40 per cent of its total oil needs.
Several factors are driving the surge in imports. Ukrainian drone strikes have damaged 10 Russian refineries in recent weeks, knocking out as much as 17 per cent of Russia's refining capacity. To keep exports flowing, Russian suppliers are offering bigger discounts of $2–$3 per barrel below benchmark Brent, up from around $1.50 in August, which was the narrowest margin since 2022.
India has significantly increased its import of Russian oil since the Ukraine war began, taking advantage of lower prices. While, there were no immediate responses from the India and the two biggest buyers of Russian oil -- Reliance and Nayara Energy -- but due to "planned and unplanned" refinery outages have cut its capacity to process crude into fuels.
The Trump administration on Wednesday slapped 25 per cent penalty tariffs on Indian goods in retaliation for the Russian oil trade. With reciprocal tariffs of 25 per cent, Indian exports to the US now face a combined 50 per cent duty. China, the largest buyer of Russian oil, has so far been spared from these measures.
Energy analysts, however, argue that the tariffs are less about Russian crude and more about stalled US-India trade negotiations. Russian oil was not part of the discussions when talks began in April. Instead, Washington's frustration over lack of access to Indian agricultural markets is believed to have triggered the punitive tariffs.
Experts also warn that if India were forced to halt Russian imports, it could remove up to one million barrels a day from global supply, driving prices back toward $100 a barrel.
