Indian oil refiners are being hemmed in by both the US and European Union’s stepped-up efforts to target Russian energy flows, with processors scrambling to buy crude from other sources.
A major buyer of Russian oil, India is now finding itself blindsided by a more aggressive approach to the Kremlin from both Washington and Brussels. President Donald Trump criticized the country’s purchases of Russian energy and weapons as he said the US would impose a relatively high import tariff of 25 per cent on Indian exports from Friday.
Even before Trump’s announcement, state-owned refiners had been issuing purchase tenders for unusually prompt arrival dates. Indian Oil Corp., the country’s biggest processor of crude, issued a buy tender for oil arriving in late September to early October on Thursday, shortly after awarding a similar one for roughly the same delivery dates.
Bharat Petroleum Corp. purchased Middle Eastern and West African crude varieties this week also for delivery in the late-September to early-October period. Typically, tenders issued at this time would be for crudes which are set to arrive in mid-to-late October.
Refiners in India had already been hit by the EU’s intention to ban imports of diesel made in the country from Russian crude. They’re now having to cope with a White House that’s become markedly more strident on Moscow’s energy flows. The processors are currently seeking clarity from New Delhi as to how their oil purchases will be affected.
India bought about 1.63 million barrels a day of Russian oil last year, more than a third of its total imports, according to ship-tracking data compiled by Bloomberg. Those volumes have largely held up so far this year. As well as the geopolitical challenges, Indian refiners are also having to deal with less crude coming from Russia, and rising prices.
