The price of Russian Urals oil in India continues to fall. The discount to the benchmark NSD grade has already exceeded $5 per barrel. The reason is a decrease in demand from Indian refineries, which are reorienting themselves to American and Middle Eastern oil amid the risk of sanctions. This is reported by UNN with reference to Kpler.
Details
Russian Urals oil is rapidly losing ground in one of its main markets – India. State oil refineries in the country have begun to reduce purchases, fearing secondary sanctions from the United States as part of new pressure packages on Moscow. Some of them, according to market data, are even considering completely stopping imports from Russia.
The current discount on Urals has exceeded $5 per barrel, although two weeks ago the price was almost on par with the NSD grade. At the same time, several tankers with Russian oil have been waiting for several days to be unloaded in the Indian ports of Jamnagar and Vadinar.
Instead of Russian barrels, Indian refineries are actively buying American WTI oil and blends from the Middle East. The average daily import of crude oil from the US has increased to 225,000 barrels and could reach 300,000 barrels per day – the highest level since 2021.
Oil trade between India and the US has already reached $7.5 billion per year, of which $6 billion is raw material. According to market expectations, future trade agreements between Delhi and Washington may include a formal commitment by India to increase imports of American energy resources, similar to the European model.
At the same time, replacing the 37% market share that Russia occupied in India will be costly. Therefore, analysts do not expect a complete rejection of Urals.
However, they also admit: the market is entering a phase of structural changes, where American and Middle Eastern oil is displacing Russian oil.
Moscow is trying to compensate for the losses – a reduction in Urals production by 180,000 barrels per day by October should free up additional volumes for export. However, uncertainty regarding new US sanctions continues to curb demand.
The Trump administration seeks to simultaneously pressure Russia and avoid a jump in oil prices to reduce inflation within the country. This creates a complex balance in which Russian Urals may lose out.
Recall
US President Donald Trump has launched an economic attack on buyers of Russian oil, imposing a 25% tariff on goods from India. This could destabilize global markets and create political risks for Trump himself.