New Delhi: Despite threats by the US, India’s state-run refiners, Indian Oil Corporation Ltd (IOCL) and Bharat Petroleum Corporation Ltd (BPCL), have resumed purchases of Russian oil. These are stocks that will be delivered on September and October. The decision was taken after discounts widened, as reported by Reuters. The return of Indian refiners to Russian crude could reduce supplies available for top buyer China, which had increased purchases during India’s absence, it has been mentioned.
Both IOCL and BPCL 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 has threatened to impose an additional 25% levy on Indian goods, effective August 27, to penalise New Delhi for its purchases of Russian crude.
Both the US and the European Union has claimed that payments made by India for this oil funds Russia’s war machinery against Ukraine. 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.
India has called this far-fetched and maintained that it will continue to buy Russian crude as it makes better economic sense.
Officials have said that 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, IOCL has purchased other Russian crude grades, including Varandey and Siberian Light.
IOCL confirmed on Monday that it would continue sourcing Russian oil, describing it as a “business decision” given the company’s heavy reliance on discounted Russian crude. The company also disclosed that 22% of its crude supply in 2024–25 came from Russia. In FY26 and the current quarter, the share has risen to around 24%. The state-run refiner also clarified that it has not received any formal direction from the 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,” the company has said.
According to Reuters, IOCL is currently securing Russian crude at a discount of $1.5 per barrel against the Dubai benchmark. The company is also planning a capital expenditure of Rs 34,000 crore in FY26, with two major expansion projects focused on refineries in Panipat, Haryana, and Vadodara, Gujarat.
