Oil options in India in the post -Russia world

This report from the newsletter “inside India” in CNBC for this week. Like what you see? You can subscribe here.

The big story

If the refineries are the children of the oil industry, India has a lot of mouths to feed it – and the American identification threats on Russian crude are clearly subject to a meal at a reasonable price.

This week, US President Donald Trump slapped 25 % of the fees on New Delhi’s exports to the United States, Its total duties up to 50 %Quoting the purchases of India from Russian oil. The White House leader reported the case in an interview with CNBC on Tuesday: “They are buying Russian oil, and they nourish the war machine, and if they would do so, then I will not be happy.”

Despite Trump’s tone, “while the United States requires India to pressure Russia, it follows a soft approach.” “What we see is that geopolitical clouds conflict with the basics of oil.”

After all, Russian purchases are not punished in India, nor new: New Delhi I had previously enjoyed the blessing of the White House To reach the Western shipping and insurance tools of SKUDE, it was purchased under the price ceiling of G7 to avoid global supply shocks simultaneously and annoy war treasures in Moscow.

In the face of international criticism, Indian officials have repeatedly defended the country as a matter of national interest.

“We will buy anywhere we can. Our commitment is the Indian consumer,” Indian Petroleum Secretary Hardip Singh Buri told CNBC from CNBC in July.

He added: “In fact, by buying from Russia, we will be (we will be) help the prices of the global economy (stability), and therefore, we contributed to global stability in oil prices.”

A source in the Indian petroleum sector said, “Global crude prices may jump to more than $ 200 a barrel for all international consumers.”

India, imported oil number 3 in the world, is proud of the ability to devote it around 5.2 million barrels per day Including 1.24 million barrels per day at the Jamnagar Factory – and the International Energy Agency Expected The country is to add another million barrels per day of demand during the prediction period until 2030.

These are some big numbers, so let’s dive into the microscopic courage.

Although the refineries can switch their panels to increase the production of a specific product for oil-gasoline, diesel, fuel oil-many Indian plants have been improved to treat high sulfur ore (so-called “sour”), such as the width of the nearby Persian Gulf … and Russia.

But sour crude in Russia is loaded in distant ports in the Baltic Sea and the Black Sea, which makes it the process of long -term arbitration in the era that precedes the war in Ukraine.

India still takes Russian sour goods at times – but compare the average of 100,000 barrels per day in 2021 to 1.796 million barrels per day in 2025 so far, according to the KPLER data provider and analyzes.

Russia’s transaction discounts, as the base of its traditional European clients from Searborne has reduced significantly, making Moscow supplies almost irresistible.

In addition, most Middle East barrels come with obligations for a year, linked to fixed regional monthly sales prices, Russian crude grades are usually sold on the basis of the place-they have a space for bargaining on size and terms of delivery and price.

Sumit Ritolia, the main research analyst for his refining and modeling at KPLER, told CNBC in the comments via email, especially in the complex facilities designed to extract high returns from CNBC in the comments via email, “from the operational point of view, Indian refining refineries adapt their systems to accommodate these scores, especially in complex facilities designed to extract high returns From CNBC in the comments via email.

He added: “The replacement of the entire Russian barrels is not an easy – logistical, economically painful, and painful,” noting that the alternatives will pressure the honest margins and eventually the sting.

This is bad news in Mumbai, where it was the Reserve Bank in India attempt Avoid inflation without strangling economic growth. The high energy costs – which were afflicted by the European countries that have suffered greatly after a short period of separating them from the Russian supplies that the sea transfers – can attract this task.

But the comfortable is not impossible.

Two sources of oil trade, who spoke to CNBC anonymously due to the sensitivity of the matter, said that Indian refineries had issued a “wave” of tenders to buy a spot ore.

A third trading source said that when the incentive of Russian price discounts is attractive, India and China are unlikely to give up the offer – and that in the end, Chinese refineries can absorb more Russian inputs that India is no longer consumed, in turn liberates more difficulties in West Africa for Indian adaptation.

“It is important to note that crude from the Middle East is usually purchased on term contracts, and therefore there may be much flexibility to buy additional sizes on an immediate basis. In this way, India can buy more crude from West Africa (WAF) and South America,” Ivan Matthews, head of APAC analysis in the state of analyzes, echo in e -mail comments. “Given the escalating definitions imposed by the United States on India, it remains to see whether India will import more than the United States as part of commercial negotiations.”

Most of us raw, as happens, is from a low (“sweet” group. India took about 285,000 barrels per day of US oil during January to July, according to KPLER data.

We are about to see whether India finds the Trump bite more impressive than its bark and the amount of Moscow crude stops completely – although the OPEC+ delegate, who spoke unknown due to the sensitivity of the conversations. In the rise in September production Possible Russian show disturbances are calculated between many uncertainty in the oil market.

“Nowadays, the risk of the display side is likely to gain pressure from the demand for customs tariffs. It seems that the United States is intertwining with multiple BRICS countries at one time-a strategy that may be inverse results in providing market stability and clarity usually expected from Washington.”