India's State-Run Refiners Skip Russian Crude Purchases Amid US Pressure

India's state-owned oil refiners, including IOC, BPCL, and HPCL, are pausing spot purchases of Russian crude due to US pressure and harsh tariffs. Refiners plan to skip purchases until there's clear government guidance. The move could disrupt global oil market dynamics and prompt a rush for alternative grades.

Title: Indian State-Owned Oil Refiners Pause Russian Crude Purchases Amid US Pressure

India's state-owned oil refiners, including Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL), and Hindustan Petroleum Corp (HPCL), are pausing spot purchases of Russian crude due to increased pressure from the United States, including harsh tariffs. Companies plan to skip purchases until there's clear government guidance, which could disrupt global oil market dynamics and prompt a rush for alternative grades [1].

The decision comes as Washington ratchets up the pressure on New Delhi over the flows with a wave of harsh tariffs. Companies like IOC are pausing spot purchases of Urals cargoes for October loading, awaiting government guidance. This shift could lead to increased demand for alternative crude sources from the US, Middle East, and Africa [1].

The move follows US President Donald Trump doubling the levy on all Indian exports to the US as a direct punishment for the country’s refiners taking Russian crude. The escalation, which hasn’t yet been matched by similar action against China, is meant to pressure on Moscow to end the war in Ukraine [1].

While overall purchases of October-loading Urals by India’s refiners are unlikely to drop to zero, a dip could prompt a rush for other grades, with US, Middle Eastern, and African cargoes as alternatives [1]. Indian Oil Corp, the country’s largest refiner, has bought 7 million barrels of crude oil for delivery in September through a spot tender, opting for supplies from the United States, Canada, and the Middle East [2].

The pause on Russian crude as discounts narrow comes as India, the world’s third-largest oil importer, has emerged as the top buyer of Russian seaborne crude since the West imposed sanctions on Moscow over its invasion of Ukraine in February 2022. According to Reuters, state refiners including IOC, BPCL, HPCL, and MRPL have not sought Russian crude in the past week or so, a notable pause given their usual volume of Russian purchases [2].

Despite the pause in spot deals, cargoes already scheduled for August and September loading are expected to be delivered as planned. Traders anticipate that overall October purchases may decline, though not drop to zero [1].

References
[1] https://m.economictimes.com/news/economy/foreign-trade/indias-state-refiners-pause-russia-oil-buys-as-us-adds-pressure/articleshow/123162697.cms
[2] https://www.moneycontrol.com/news/business/commodities/ioc-buys-7-million-barrels-of-crude-from-us-canada-and-uae-as-state-refiners-pause-russian-oil-purchases-13381253.html