Russian oil discounts deepen for Indian refiners amid tariff tensions with US: Report
Russia’s flagship Urals grade is being offered at lower rates for cargoes loading in late September and October. The discount stood at around $2.50 last week, compared with only $1 in July.
- Sep 2, 2025,
- Updated Sep 2, 2025 9:20 PM IST
Russian crude has become even cheaper for Indian refiners, with discounts widening to $3–$4 per barrel just as the Donald Trump administration imposes steep tariffs on New Delhi for its continued oil imports from Moscow. According to a Bloomberg report, Russia’s flagship Urals grade is being offered at lower rates for cargoes loading in late September and October. The discount stood at around $2.50 last week, compared with only $1 in July. By contrast, US crude shipments to India are arriving at a $3 premium to Brent, reinforcing the cost advantage of Russian barrels.
India emerged as a leading buyer of Russian crude after the Ukraine war began in 2022. However, the South Asian nation now faces punitive US tariffs for the trade, along with repeated criticism from President Donald Trump and his officials. These moves have pushed New Delhi to show solidarity with Moscow and rebuild ties with Beijing, once viewed primarily as a rival.
At the Shanghai Cooperation Organization summit in China this week, Prime Minister Narendra Modi described India’s ties with Russia as “special.” Modi also met Chinese President Xi Jinping, with both leaders pledging to act as partners rather than rivals and announcing steps toward closer cooperation.
The sharpest US criticism has come from White House adviser Peter Navarro, who accused India of fueling Russia’s war economy. In response, Union Oil Minister Hardeep Puri defended the imports in a column in The Hindu, arguing that Russian crude helped prevent a global oil price surge that could have destabilized economies worldwide.
Despite a brief pause in early August, Indian refiners have resumed Russian purchases at scale. The wider discounts are expected to draw stronger buying interest, especially when compared with higher-priced US supplies. Data from Kpler and port agents shows that Indian refiners received 11.4 million barrels of Russian crude between August 27 and September 1, including one shipment from a US-sanctioned vessel, the Victor Konetsky, via ship-to-ship transfer.
The Urals grade, shipped mainly from Russia’s western ports, remains Moscow’s flagship crude. While China has avoided the same level of scrutiny as India, it remains Russia’s largest oil customer, sourcing supplies through both pipelines and tankers.
Rising tariff tensions
The deeper discounts come against the backdrop of Washington’s escalating trade offensive. The Trump administration has imposed a 50% tariff on Indian goods in retaliation for rising Russian oil imports, along with an additional 25% duty on other products. Navarro accused Indian refiners of refining discounted Russian crude and reselling it at a premium across Europe, Africa, and Asia — indirectly funding Moscow’s war effort.
India’s purchase of Russian oil
India, the world’s third-largest oil importer, has transformed its sourcing pattern since 2022. Russian crude, once negligible in India’s oil basket, now accounts for nearly 40% of imports. In FY 2024–25, Russia supplied 36% of India’s 5.4 million barrels per day, surpassing traditional suppliers such as Iraq, Saudi Arabia, the UAE, and the US.
New Delhi maintains that its purchases are legitimate, noting that no international sanctions prohibit crude imports from Russia and that the US itself has stopped short of banning them.
Still, President Trump has doubled down on criticism, blasting trade relations with India as “a totally one-sided disaster.” On Truth Social, he claimed India once offered to cut tariffs to zero but said the move came too late. He accused New Delhi of buying Russian oil and arms while selling “massive amounts of goods” into the US market, all while maintaining high barriers against American exports.
“The reason is that India has charged us, until now, such high tariffs — the most of any country — that our businesses are unable to sell into India. It has been a totally one-sided disaster!” Trump posted.
Russian crude has become even cheaper for Indian refiners, with discounts widening to $3–$4 per barrel just as the Donald Trump administration imposes steep tariffs on New Delhi for its continued oil imports from Moscow. According to a Bloomberg report, Russia’s flagship Urals grade is being offered at lower rates for cargoes loading in late September and October. The discount stood at around $2.50 last week, compared with only $1 in July. By contrast, US crude shipments to India are arriving at a $3 premium to Brent, reinforcing the cost advantage of Russian barrels.
India emerged as a leading buyer of Russian crude after the Ukraine war began in 2022. However, the South Asian nation now faces punitive US tariffs for the trade, along with repeated criticism from President Donald Trump and his officials. These moves have pushed New Delhi to show solidarity with Moscow and rebuild ties with Beijing, once viewed primarily as a rival.
At the Shanghai Cooperation Organization summit in China this week, Prime Minister Narendra Modi described India’s ties with Russia as “special.” Modi also met Chinese President Xi Jinping, with both leaders pledging to act as partners rather than rivals and announcing steps toward closer cooperation.
The sharpest US criticism has come from White House adviser Peter Navarro, who accused India of fueling Russia’s war economy. In response, Union Oil Minister Hardeep Puri defended the imports in a column in The Hindu, arguing that Russian crude helped prevent a global oil price surge that could have destabilized economies worldwide.
Despite a brief pause in early August, Indian refiners have resumed Russian purchases at scale. The wider discounts are expected to draw stronger buying interest, especially when compared with higher-priced US supplies. Data from Kpler and port agents shows that Indian refiners received 11.4 million barrels of Russian crude between August 27 and September 1, including one shipment from a US-sanctioned vessel, the Victor Konetsky, via ship-to-ship transfer.
The Urals grade, shipped mainly from Russia’s western ports, remains Moscow’s flagship crude. While China has avoided the same level of scrutiny as India, it remains Russia’s largest oil customer, sourcing supplies through both pipelines and tankers.
Rising tariff tensions
The deeper discounts come against the backdrop of Washington’s escalating trade offensive. The Trump administration has imposed a 50% tariff on Indian goods in retaliation for rising Russian oil imports, along with an additional 25% duty on other products. Navarro accused Indian refiners of refining discounted Russian crude and reselling it at a premium across Europe, Africa, and Asia — indirectly funding Moscow’s war effort.
India’s purchase of Russian oil
India, the world’s third-largest oil importer, has transformed its sourcing pattern since 2022. Russian crude, once negligible in India’s oil basket, now accounts for nearly 40% of imports. In FY 2024–25, Russia supplied 36% of India’s 5.4 million barrels per day, surpassing traditional suppliers such as Iraq, Saudi Arabia, the UAE, and the US.
New Delhi maintains that its purchases are legitimate, noting that no international sanctions prohibit crude imports from Russia and that the US itself has stopped short of banning them.
Still, President Trump has doubled down on criticism, blasting trade relations with India as “a totally one-sided disaster.” On Truth Social, he claimed India once offered to cut tariffs to zero but said the move came too late. He accused New Delhi of buying Russian oil and arms while selling “massive amounts of goods” into the US market, all while maintaining high barriers against American exports.
“The reason is that India has charged us, until now, such high tariffs — the most of any country — that our businesses are unable to sell into India. It has been a totally one-sided disaster!” Trump posted.