Russia offers India mega discounts on oil purchases

Russia is reportedly offering oil to India at discounts of as much as $35 a barrel on prices before the Ukraine war

The invasion of Ukraine has brought unto President Vladimir Putin’s Russia a slew of sanctions from the western world. The impact of international pressure has started showing up, with Russia bearing the brunt of the consequences of the military operations it kicked off on Ukraine. However, it looks like India is gaining much even as sanctions are hurting Russia.

The latest we hear is that Russia has offered cool discounts on the direct sale of oil to India. It is being reported that Russia is offering flagship Urals grade to India at discounts of as much as $35 a barrel on prices before the war.

Oil price discounts could aid India to lift more shipments

The move could be to aid India lift more shipments, the report added. It needs to be noted that Brent prices have gone up by about $10 since the war, and it could be inferred that there are chances of an even larger reduction from current prices.

This move by Russia comes close on the heels of the United States’ warning that it would not want to see India’s import of energy and other commodities from Russia speeding up. It was only on Thursday that the US had said that there could be consequences for countries actively attempting to circumvent or backfill American sanctions against Moscow for its invasion of Ukraine.

US not against any country nursing good relations with Russia

India’s import of Russian crude for discounted prices needs to be seen in this context. The US State Department had clarified that it is not against any country having its own relationship with Moscow, and that Washington was not at all demanding any change in such relationships. However, countries attempting to circumvent American US against Moscow and dealing in trade with Russia could face consequences.

Apart from the discounts on crude, Russia has also offered India rupee-rouble-denominated payments using Russia’s messaging system SPFS. This is expected to make trading more attractive for India.

Going by earlier reports, India has already bought close to 13 million barrels of Russian crude oil, post-western sanctions on Russian entities after Moscow’s invasion of Ukraine. This is against the 16 million barrels bought during the whole of last year.

Indian oil major Indian Oil Corporation has a contract with Russian oil company Rosneft, and this tie up provides IOC with the option to buy up to 2 million tonnes, equivalent to about 15 million barrels, of Urals in 2022, it has been reported.

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