New Delhi
The US has imposed 50 percent tariff on India to buy oil from Russia. Now amid American pressure, India’s government oil companies have decided to stop the purchase of spots of Russian crude oil. Companies like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have currently distanced distance from the purchase of Russia’s Urals grade oil for October loading. This decision will remain effective until the central government gives any clear guidelines on it.
This step has been taken at a time when US President Donald Trump has put double tariff on all exports in India. It is believed that this decision is “direct punishment” by India to continue the purchase of Russian oil. The purpose of the Trump government’s move is to pressurize Russia to end the Ukraine War.
The Government of India has formally not forbidden oil companies to buy oil from Russia. Prime Minister Narendra Modi -led government has taken a tough stand against Trump’s tariff. According to a report by Bloomberg, the government has definitely asked companies to keep a plan for non-Russian options.
Indian oil companies usually purchase oil in short-term bicycles of 1.5 to 2 months ago, ensuring timely supply. In this cycle, procurement plans are currently being made for October. Although it is unlikely that the purchase of Urals, a October loading from India, will stop completely, but there may be a decrease in the purchase.
This may increase the demand for other crude oil grades in the US, West Asia and Africa. Traders believe that Russia can now sell oil to China at more discounts, although China does not take much Urals grade. Urals grade oil is a type of crude oil exported from Russia, which is mainly obtained from the oil areas of the Ural and Volga regions. It is a medium-thorough and high sulfur-containing crude oil, which is mainly used to produce diesel, gasoline and other petroleum products in refineries.
Significantly, in the end of July, there was also a decline in the purchase of Urals for September loading as prices were high. After this, government companies have bought oil from other areas through spot tenders. At the same time, private companies Reliance Industries and Naira Energy are keeping silence on this issue. Naira Energy is facing a decline in production rates due to restrictions imposed by the European Union.
Russia’s Urals grade crude oil comes from western Russia. India and September loading cargo India is likely to be delivered normally until any new instruction comes from the Government of India. Some tankers have launched cargo on Indian ports in recent times, although there have been some slight delays. Before the Ukraine War, India used to buy Russian oil equal to almost zero, but after the war, the figure reached above 2 million barrels per day.
Former Refinery Director of Bharat Petroleum, R.K. According to Ramachandran, “Operations will definitely be interrupted for some time, but there will be a balance in oil demand and supply. If Russian supply is difficult, crude oil can be a better option from Middle East countries, especially Saudi Arabia and Iraq.”
This development has also shocked the global market. Brent crude prices are currently stable near $ 67 per barrel, which is seen after a decline of five consecutive days. Traders are assessing that if India reduces oil purchases from Russia, what will be affected on the global supply chain.
