Indian state-owned refiners Indian Oil Corp. and Bharat Petroleum Corp. have resumed their purchases of Russian Urals crude oil for September and October loading, following a brief pause. This decision comes amid escalating tensions with the United States, as threats of imposing 50% tariffs on Indian imports emerge, with half of these tariffs allegedly attributed to India's Russian oil trade.

US Criticism and Threats

The resumption of Russian oil purchases has drawn sharp criticism from US officials. White House Trade Adviser Peter Navarro accused India's oil lobby of profiteering from the trade, while Treasury Secretary Scott Bessent alleged that wealthy Indian families are benefiting from these transactions.

Market Factors and Discounts

The decision to resume purchases appears to be driven by market factors:

• The discount for Russian Urals crude has deepened to $2.50 per barrel, compared to $1.00 in July.
• This increased discount provides an additional incentive for Indian refiners.
• India maintains that its crude oil import decisions are based on market factors and national interests.

Geopolitical Implications

The ongoing tensions over oil trade have implications for India's international relations:

• India appears to be moving closer to Russia and China.
• Prime Minister Modi has referred to Russian President Putin as a friend.
• Modi is reportedly planning his first visit to China in seven years.
• This geopolitical shift comes after India had previously paused Russian oil buying following criticism and was asked to prepare pivot plans.

India's Stance

Despite the pressure from the US, India remains firm on its position:

• The country asserts that its crude imports are determined by market factors and national interests.
• India maintains that these decisions are not influenced by external pressures.

The situation highlights the complex interplay of global oil markets, geopolitical relationships, and economic interests. As India navigates these challenging waters, the decisions made by state refiners like Indian Oil Corp. and Bharat Petroleum Corp. will continue to be closely watched by international observers.

Indian Oil Corp (IOC), India's state-owned refining giant, has made significant moves in the global oil market, purchasing large volumes of crude oil from various sources. This strategic shift comes as India faces mounting pressure from Western nations over its Russian oil imports.

Substantial Non-Russian Crude Purchases

IOC has acquired an unusually large volume of crude oil for immediate delivery:

• At least 5 million barrels of US crude
• 2 million barrels from Abu Dhabi
• 4 million barrels of West African crude
• Additional volumes of UAE's Murban crude

These purchases, totaling at least 11 million barrels, represent a notable diversification of IOC's crude sources.

Geopolitical Pressure and Economic Considerations

The substantial non-Russian purchases follow increasing pressure from Washington and Europe regarding India's Russian oil imports. There have been reports of threats of secondary tariffs on Russian oil buyers, with India's stance drawing specific criticism.

India has become the world's largest buyer of Russian seaborne crude, with approximately one-third of its oil imports now coming from Russia, up from nearly zero previously. This shift has drawn international attention and criticism.

Economic Advantages

Despite the geopolitical tensions, there are economic incentives for Indian refiners to explore alternative sources. Currently, they can earn about $3.00 per barrel more by purchasing US supplies rather than Murban crude for November deliveries.

Urgent Demand Signals

Traders have described IOC's multiple back-to-back purchase tenders as unusual, indicating urgent demand. This urgency may be attributed to the need to secure non-Russian crude supplies quickly.

Management Changes at IOC

Recent LODR data reveals significant changes in IOC's senior management:

• Shri Satish Kumar Vaduguri has superannuated from his role as Director (Marketing).
• Shri Arvinder Singh Sahney, the Chairman of IOC, has been entrusted with the additional charge of Director (Marketing) for a period of three months or until further notice.

These management changes coincide with IOC's strategic shift in crude oil sourcing, potentially influencing the company's future market decisions.

As global oil dynamics continue to evolve, IOC's recent purchases and management restructuring highlight the complex interplay between geopolitical pressures and economic considerations in the energy sector. The company's actions may signal a broader trend of diversification among Indian refiners as they navigate the challenging global energy landscape.