India's State-Owned Refiners Resume Russian Oil Purchases Despite US Tariffs

Strategic Insights -

India's state-owned oil refiners, Indian Oil Corp. and Bharat Petroleum Corp., have resumed purchasing Russian oil after a brief pause following the US's announcement of a 25% tariff on Russian oil imports. The resumption comes despite the US's warning that continued purchases could lead to tariffs of up to 100% on Indian exports to the US. India has emerged as one of Moscow's largest oil buyers, with imports rising over 20-fold to over 2 million barrels per day since Russia's invasion of Ukraine in 2022.

Key Takeaways:

  • India's state-owned oil refiners, Indian Oil Corp. and Bharat Petroleum Corp., have resumed purchasing Russian oil despite the US's announcement of a 25% tariff on Russian oil imports.
  • The resumption of purchases follows a brief pause triggered by the US's announcement, with deliveries expected in September and October.
  • India has emerged as one of Moscow's largest oil buyers, with imports rising over 20-fold to over 2 million barrels per day since Russia's invasion of Ukraine in 2022.
  • China has also expanded its role as a leading buyer of Russian oil, with imports of Urals crude doubling in August to nearly 75,000 barrels per day.
  • The US has warned that countries like China could face tariffs of up to 100% on their exports to the US if they continue buying Russian oil.
  • Oil revenues account for roughly one-third of Russia's budget, making energy exports a vital source of funding for its war against Ukraine.
  • US Treasury Secretary has called India's practice of buying Russian oil "unacceptable."
  • India's imports of Russian oil have been accused of exploiting the situation, with the US warning that continued purchases could lead to tariffs on Indian exports.

Statistics:

  • India's imports of Russian oil have risen over 20-fold to over 2 million barrels per day since Russia's invasion of Ukraine in 2022.
  • China's imports of Urals crude from the Baltic and Black Sea have doubled in August to nearly 75,000 barrels per day.
  • Russia's oil revenues account for roughly one-third of its budget.
  • The US has warned that countries like China could face tariffs of up to 100% on their exports to the US if they continue buying Russian oil.
  • The deadline for Russia to comply with a June 14 agreement to cap oil prices for European buyers has passed, but no additional measures have been imposed by the US.

Sources:

  • Bloomberg, reported on Aug. 20
  • Bloomberg, reported on Aug. 19
  • The Washington Times, reported on Aug. 19
  • US Treasury Secretary's statement, Aug. 19