The report comes from CNBC’s “Inside India” newsletter this week. Like what you saw? You can subscribe here.
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If the refinery is a child of the oil industry, India’s mouth can feed a lot, and the U.S. tariff threat from Russian crude oil is hurting a clearly affordable meal voucher.
This week, U.S. President Donald Trump took an additional 25% tax on New Delhi’s exports to the United States Total responsibilities reach 50%On the grounds that India bought Russian oil. White House leaders tagged the issue in a CNBC interview on Tuesday: “They are buying Russian oil, cheering for the war machine, and if they are going to do that, then…then…I won’t be happy.”
Despite Trump’s tone, “While the United States requires India to put pressure on Russia, it follows a gentle approach,” Mukesh Sahdev, chief oil analyst at Rystad Energy, told CNBC via email. “What we’re seeing is that geopolitical pull is defying oil fundamentals.”
After all, India’s Russian purchases were neither sanctioned nor new: New Delhi I liked the White House blessings before To obtain crude oil from Western transportation and insurance tools, the G7 imposes a price cap to avoid global supply shocks and reduce the price cap of Moscow’s war pool.
In the face of international criticism, Indian officials have repeatedly defended the country’s intake for national interests.
“We will buy from anywhere. Our commitment is for Indian consumers,” Indian Oil Minister Hardeep Singh Puri told CNBC’s Dan Murphy in July, noting that when buying Seaborne Russian crude oil, we were approved in the war in Ukraine, including our friends, but please be in the price of Russia, but in the price of our friends.
He added: “In fact, by purchasing from Russia, we will help the global economy (stabilize) prices, and therefore, we contribute to the global stability of oil prices.”
If India is to stop Russian crude oil today, global crude oil prices for all global consumers could jump to above $200 a barrel,” a source from the Indian oil sector told CNBC’s Emma Graham.
India is the world’s third oil importer with refining capabilities 5.2 million barrels per day – Include 1.24 million barrels per day in Jamnagar factory alone – International Energy Agency expect The country will increase demand for daily demand by 2030 during the forecast period.
That’s some big numbers, so let’s dig deeper.
While refineries can switch their plates to maximize production of specific oil products (e.g. gasoline, diesel, fuel, many Indian plants are optimized to handle high sulfur (so-called “acid”) crude crude oil, such as the nearby Persian Gulf… and the supply of Russia’s Urals.
But the sour crude from Russia is loaded in distant ports of the Baltic and Black Seas, which makes it unfavorable for long-distance arbitrage in the era before the Ukrainian War.
India still occasionally rides Russian acid cargo – but compares its 100,000 barrels imported in 2021 to the average barrel of 1.796 billion barrels per day in 2025, according to data and analytics provider Kpler.
The deal discounts offered by Russia are its traditional European marine customer base, greatly reducing Russia’s customer base, which makes the supply in Moscow almost irresistible.
Additionally, most Middle East barrels come with a one-year commitment, associated with fixed regional monthly sales prices, with Russian crude oil grades usually sold on site – leaving room for bargaining, delivery terms and prices.
“Operationally speaking, Indian refineries have adapted to these achievements, especially at complex facilities designed to extract high returns from medium-sized residues,” Sumit Ritolia, lead research analyst at KPLER refining and modeling, told CNBC in an email.
He added: “It’s not easy to replace the Russian barrel in all respects – logically daunting, economic pain and geopolitical troubles.”
This is bad news in Mumbai, the RBI has been there attempt Avoid inflation without stifling economic growth. The surge in energy costs – Such energy costs have greatly tortured the task shortly after they were separated from the materials of the ocean Russia.
But inconvenience is not impossible.
Due to the sensitivity of the matter, two sources of oil deals who spoke anonymously to CNBC said that Indian refineries issued a tender to buy spot crude oil.
Sources from the third deal said that when incentives for Russian price discounts are attractive, India and China are unlikely to give up supplies – ultimately, Chinese refineries can absorb more Russian intake from the Russian intake that India no longer consumes, thus freeing up larger West Africa, allowing India’s refineries to release higher refineries even more.
“It is important to note that crude oil in the Middle East is usually purchased on a semester contract, so there may not be much flexibility to buy additional sales in time. Therefore, India can buy more crude oil from West Africa (WAF) and South America,” commented Ivan Mathews, APAC head of ApaC Analytics, in analytics company Vortexa, Echo echo echo in Emale emmed Implesed. “In light of the escalating tariffs imposed by the U.S. on India, it remains to be seen whether India will import more crude oil from the U.S. as part of the trade negotiations.”
It happens that most U.S. crude oil is a low-sulfur (“sweet”) variety. According to KPLER data, India takes about 285,000 barrels of oil every day from January to July.
We will see if India finds Trump’s biting more impressive than his bark and stops Moscow’s vulgar intake – despite the OPEC+ deputies speaking anonymously due to the sensitivity of the conversation, the eight members of the most recent decision were the ones that were recently decided. On September production In the oil market, potential Russian supply disruptions are calculated in many lingering uncertainties.
“Currently, supply-side risks may exceed demand-side pressure on tariffs. The United States appears to be entangled with multiple BRICS countries at the same time – a strategy that may prove to be market stability and clarity provided in Washington, which often produces counterproductive strategies.
