Indian Oil, BPCL resume Russian oil purchases amid widened discounts: Report

India's state-run refiners, Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL), have resumed purchases of Russian oil for September and October delivery after discounts widened, Reuters reported, quoting two company officials. The return of Indian refiners to Russian crude could reduce supplies available for top buyer China, which had increased purchases during India’s absence.

The refiners had halted Russian oil imports in July due to narrower discounts and amid criticism from Washington over India’s continued trade with Moscow. US President Donald Trump threatened to impose an additional 25% levy on Indian goods, effective August 27, to penalise New Delhi for its purchases of Russian crude.

According to officials, discounts on Russia’s flagship Urals crude have now widened to about $3 per barrel, making it attractive for Indian refiners once again. In addition to Urals, IOC has purchased other Russian crude grades, including Varandey and Siberian Light.

The United States has repeatedly alleged that India’s Russian oil purchases indirectly fund the war in Ukraine. More recently, White House trade adviser Peter Navarro wrote in the Financial Times that India acts as a global clearinghouse for Russian oil, converting embargoed crude into high-value exports while providing Moscow with much-needed dollars.

On Monday, IOC confirmed it would continue sourcing Russian oil, describing it as a “business decision” given the company’s heavy reliance on discounted Russian crude.

IOC disclosed that 22% of its crude supply in fiscal year 2024–25 came from Russia. In FY26 and the current quarter, the share has risen to around 24%. The company also clarified that it has not received any formal direction from the Indian government regarding its Russian oil imports. “Neither are we being told to buy nor told not to buy. We are not making extra efforts to either increase or decrease the share of Russian crude,” IOC said.

Currently, IOC is securing Russian crude at a discount of $1.5 per barrel against the Dubai benchmark. According to Reuters, the company is also planning a capital expenditure of ₹34,000 crore in FY26, with two major expansion projects focused on refineries in Panipat, Haryana, and Vadodara, Gujarat.

Russia reaffirms oil supply to India

Earlier in the day, a Russian embassy official in New Delhi said Moscow would continue supplying oil to India and confirmed that President Vladimir Putin will meet Prime Minister Narendra Modi in the capital before year-end.

Roman Babushkin, chargé d’affaires at the Russian embassy, told reporters that Russia has a “very, very special mechanism” to ensure uninterrupted oil supply to India. He added that Indian crude imports from Russia would remain at current levels.

Meanwhile, the U.S. has confirmed its plan to impose an additional 25% tariff on Indian exports beginning August 28, citing New Delhi’s rising imports of Russian oil since Western sanctions were imposed on Moscow. However, Washington has stopped short of imposing similar tariffs on China, despite its comparable purchases of Russian crude.

Last month, the European Union sanctioned Russian-backed Indian refiner Nayara Energy, prompting it to scale back processing while trading partners reduced engagement with the company.