The energy market is experiencing significant changes: the era of deep discounts on Russian oil for Indian buyers is coming to an end. According to Reuters, Vetsa Ramakrishna Gupta, the CFO of India's largest oil refiner, Bharat Petroleum Corp (BPCL), confirmed that traders are no longer offering discounts on Russian crude oil supplies.
A sharp turn in the market
India, the world's third-largest oil importer and consumer, recently recorded a record increase in purchases of Russian crude. This surge was driven by supply disruptions from traditional partners in the Middle East. However, the market situation has changed rapidly.
According to Gupta, despite the availability of Russian oil offers for September, the margin for buyers has disappeared. "Due to events in the oil markets, no one is currently offering a discount on Russian oil," the BPCL director stated. Previously, the discount on the Urals grade in Indian ports exceeded $10 per barrel, making it extremely attractive for refiners.
Geopolitics versus economics
The key factor changing pricing policy has been geopolitical risks. Houthi attacks in the Red Sea and the growing threat to transit through the Strait of Hormuz have led to a rise in global oil prices. This has forced traders to reconsider deal terms.
Bharat Petroleum Corp noted that the current situation could complicate the logistics of certain shipments following Red Sea routes. Increased risks and transportation costs are automatically passed on to the final product cost, neutralizing the previous advantages of Russian oil.
