Photo caption: Indian flag
* India BPCL buys 10 million barrels of US oil via five-month tender, sources say
Indian state refiners have started making enquiries with trading firms about purchases of Russia’s Urals crude oil as discounts widen, three people with knowledge of the matter said on Thursday, ahead of a high-profile meeting of U.S. and Russian leaders on Friday.
Indian state refiners – Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd – paused Russian oil purchases last month as discounts narrowed.
The state refiners, which account for more than 60% of India’s 5.2 million barrels per day of refining capacity, buy Russian oil on a delivered basis.
Spot discounts for Russian Urals crude delivered to India in October have widened to about $2.70 per barrel from $1-$1.50 per barrel in late July, the sources said. The wider discount makes delivery of Urals cheaper than it was in July.
India became the largest customer of Russian seaborne oil from 2022, after Western countries shunned Russian oil and imposed sanctions on Moscow for its invasion of Ukraine.
U.S. President Donald Trump last month threatened sanctions on buyers of Russian exports unless Russia agrees to a peace deal with Ukraine. Trump and Russian President Vladimir Putin will discuss a possible deal to end the war in Ukraine when they meet on Friday in Alaska.
“We will wait for the outcome of Trump-Putin talks that will give us some indications,” one of the sources said.
State-run Bharat Petroleum Corp aims to continue using Russian oil to meet up to 35% of its processing needs if there are no new sanctions, Vetsa Ramakrishna Gupta, its finance head, told an analyst call on Thursday.
BPCL’s Russian oil purchases slowed in July as discounts narrowed, he added.
Indian state refiners have turned to spot purchases from countries including Brazil, West Africa, and the United States to replace lower Russian oil supplies.
Russian Urals crude is priced at a discount to Brent crude oil, a widely used oil pricing benchmark.
Russian oil accounts for more than a third of India’s overall purchases. Unlike state refiners, private companies, including Reliance Industries and Nayara Energy, have term contracts to buy Russian oil.
Meanwhile, India’s state-run Bharat Petroleum Corp has awarded a five-month tender for 10 million barrels of U.S. oil to European trader Glencore, two people with knowledge of the matter said, aiding India’s efforts to deepen energy ties with Washington.
India, the world’s third-largest oil importer, is increasing imports from the United States as negotiations for a bilateral trade agreement continue.
Under the deal, Glencore will deliver 2 million barrels of WTI Midland crude per month from November to March to the Indian refiner, the sources said, doubling the volume BPCL imported under its previous tender.
Indian refiners and traders do not comment on oil trade issues citing confidentiality.
The increased imports are expected to support India’s efforts to narrow its trade surplus with the U.S., which stood at $45.7 billion last year.
Trade tensions between India and the United States have escalated sharply in the last few weeks, with U.S. President Donald Trump imposing a 25% tariff on Indian goods starting August 7 and threatening similar measures over the Asian country’s continued purchases of Russian oil.
During Prime Minister Narendra Modi’s visit to Washington in February, India pledged to raise U.S. energy purchases from $10 billion to $25 billion, with both nations targeting $500 billion in bilateral trade by 2030.
Indian refiners have already increased imports of U.S. oil from the spot markets on improved arbitrage economics of sending Atlantic Basin grades to Asia.
Refiners also plan to raise imports of cooking gas from the U.S. from 2026, while the federal government is looking at eliminating import tax on propane and liquefied natural gas purchases from the U.S.
=== Reuters ===
