US Treasury sanctions on Russia’s two biggest oil firms, coupled with the threat of secondary sanctions on foreign lenders dealing with them, have intensified pressure on India to scale back crude imports from Moscow.
India’s purchases from Russia still account for 33 per cent of total crude imports, but this share is likely to decline after end-November as refiners diversify towards Middle Eastern and US supplies, Nomura India said in a note.
This will increase the cost of oil imports, but with the Russian oil discount at $1.8-2.2 per barrel, Nomura believes the direct impact would be manageable at 0.04 per cent of GDP), although the indirect impact via higher global oil prices would be more important to watch.
India could also stand to gain if this shift leads to a trade deal with the US and the lowering of tariffs, Nomura said.
"We currently assume that the 25 per cent Russian penalty will be removed after November, while the 25 per cent reciprocal tariff stays through FY26," it said.
After falling for three straight weeks, crude oil prices rebounded sharply last week, supported by geopolitical and trade developments. The US decision to impose additional sanctions on Russian oil giants Rosneft and Lukoil reignited supply concerns, driving prices above $61 per barrel.
"Overall, we believe that the near-term costs of a recalibration of oil imports away from Russia should be more than offset by the benefit of lowering of US tariffs," Nomura said.
Last week, the US President Donald Trump claimed that PM Modi had assured him that India would halt its Russian oil imports, saying that while would not immediately stop, the shift will be a little bit of a process, but the process will be going to be over very soon. India's official communique neither confirmed nor delined the claims, Nomura said.
Optimism over trade negotiations with China and India further boosted sentiment, Rahul Kalantri, VP Commodities, Mehta Equities said today.
"Despite the recovery, persistent oversupply in global markets and uncertainty stemming from the US government shutdown may restrict any major upward momentum. We expect crude oil prices to remain volatile in today’s session. Crude oil is having support at $60.50-59.70 and resistance is at $62.00-62.70 in today’s session. In rupee terms, crude oil has support at Rs5,340,-5,260 while resistance at Rs5,495-5,555," he said.
US Treasury sanctions on Russia’s two biggest oil firms, coupled with the threat of secondary sanctions on foreign lenders dealing with them, have intensified pressure on India to scale back crude imports from Moscow.
India’s purchases from Russia still account for 33 per cent of total crude imports, but this share is likely to decline after end-November as refiners diversify towards Middle Eastern and US supplies, Nomura India said in a note.
This will increase the cost of oil imports, but with the Russian oil discount at $1.8-2.2 per barrel, Nomura believes the direct impact would be manageable at 0.04 per cent of GDP), although the indirect impact via higher global oil prices would be more important to watch.
India could also stand to gain if this shift leads to a trade deal with the US and the lowering of tariffs, Nomura said.
"We currently assume that the 25 per cent Russian penalty will be removed after November, while the 25 per cent reciprocal tariff stays through FY26," it said.
After falling for three straight weeks, crude oil prices rebounded sharply last week, supported by geopolitical and trade developments. The US decision to impose additional sanctions on Russian oil giants Rosneft and Lukoil reignited supply concerns, driving prices above $61 per barrel.
"Overall, we believe that the near-term costs of a recalibration of oil imports away from Russia should be more than offset by the benefit of lowering of US tariffs," Nomura said.
Last week, the US President Donald Trump claimed that PM Modi had assured him that India would halt its Russian oil imports, saying that while would not immediately stop, the shift will be a little bit of a process, but the process will be going to be over very soon. India's official communique neither confirmed nor delined the claims, Nomura said.
Optimism over trade negotiations with China and India further boosted sentiment, Rahul Kalantri, VP Commodities, Mehta Equities said today.
"Despite the recovery, persistent oversupply in global markets and uncertainty stemming from the US government shutdown may restrict any major upward momentum. We expect crude oil prices to remain volatile in today’s session. Crude oil is having support at $60.50-59.70 and resistance is at $62.00-62.70 in today’s session. In rupee terms, crude oil has support at Rs5,340,-5,260 while resistance at Rs5,495-5,555," he said.
