India’s two largest refiners have secured some 22 million barrels in non-Russian crude for delivery in September and October following President Trump’s decision to impose an additional 25% tariff on Indian imports if it continues buying Russian oil.
Per Reuters, which cited unnamed trading sources, the cargos were secured on the spot market, which is not normally a place that large state-owned refiners such as Bharat Petroleum and Indian Oil Corp. frequent. Now, however, under the threat of tariffs, they are switching to alternative suppliers.
Indian Oil Corp., for instance, has bought 2 million barrels of U.S. Mars crude, another 2 million barrels of Brazilian oil, and 1 million barrels of Libyan crude, the Reuters sources said. These deals follow the securing of 8 million barrels by Indian Oil Corp. from sellers in the Middle East, the United States, Canada, and Nigeria.
Trump said earlier this week he would bring the total tariff load on Indian imports to 50% because of India’s refusal to give up Russian oil. New Delhi responded by saying additional tariffs would be unjustified and unfair, with the foreign ministry noting in a statement that the U.S. and the European Union continue to import goods from Russia despite their hawkish public stance on the country’s foreign policy.
In a later statement, India’s foreign ministry said that oil import decisions were “based on market factors and done with the overall objective of ensuring the energy security of 1.4bn people of India”.
Yet Indian refiners are being cautious and looking for alternative supplies. Bloomberg reported, citing trading sources, that Indian state refiners were going to sit out the next buying cycle on the spot market until there is clarity about oil-buying from the government in New Delhi. Meanwhile, Bloomberg reported that the government had instructed refiners to find alternative suppliers of crude.
By Irina Slav for Oilprice.com
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