China cuts Saudi orders for Russian crude while Trump punishes India with steep tariffs

Time of India

13 hours ago

Chinese refiners are reducing Saudi oil orders, hinting at a shift towards Russian crude due to its competitive pricing. While China defends its Russian oil imports as legitimate, the US has pressured India with tariffs over similar purchases. India, in turn, criticizes the West's double standards, highlighting their continued trade with Russia.
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Chinese refiners are cutting back on orders for Saudi oil, with the decline hinting at a shift in global crude flows as more Russian barrels enter the market, according to Energy Aspects Ltd.The London-based consultant said in an 11 August note that the drop in so-called nominations for September-loading term cargoes from Saudi Aramco showed refineries were holding back purchases due to greater availability of Russia's Urals crude and comfortable stockpiles. The note did not cite any sources.The global oil market is closely watching the potential reordering of flows after the United States and European Union increased pressure on India over its imports of Russian energy. With no comparable action taken against China, there is growing speculation that more of Moscow's oil will be bought by mainland refiners, including Urals crude shipped from Russia's western ports.Bloomberg, citing traders informed by the producer, reported that Saudi Aramco will sell 43 million barrels of September-loading crude under contractual supplies to China. This is down from 51 million barrels in the previous month and below the year-to-date monthly average of about 45 million barrels. China had earlier defended its Russian oil imports as legitimate, responding to US pressure after Washington imposed secondary tariffs on India over its energy purchases from Moscow.Energy Aspects said Chinese interest in Urals crude is increasing as it remains the 'most competitive' compared with similar Middle Eastern grades. However, the consultancy added that China's intake has a limit, as Russian imports already account for 17% of its overseas supplies, with 20% viewed as the ceiling for a single country.US President Donald Trump had this month cited India's imports of Russian crude when announcing an additional 25% tariff on imports from India. The measure, set to take effect on August 28, could push tariff rates on some Indian goods to as much as 50% — high enough to effectively hit U.S. imports from India, which reached nearly $87 billion in 2024.The move appears aimed at increasing Trump's leverage with Russian President Vladimir Putin ahead of their planned meeting in Alaska this week, with India being used as a bargaining tool in the process.Meanwhile, a White House official said on Monday that Trump has extended a tariff truce with China by another 90 days , preventing the imposition of triple-digit duties on Chinese goods.The new decision stops U.S. tariffs on Chinese goods from jumping to 145%, and Chinese tariffs on U.S. goods from rising to 125%. For now, it keeps U.S. tariffs on Chinese imports at 30%, while China's tariffs on U.S. imports stay at 10%.Indian refiners have become the world's biggest buyers of Russian oil after turning to discounted supplies in the wake of Western sanctions on Moscow over its invasion of Ukraine in February 2022. Russia's share of India's total oil imports jumped from just 1.7% in 2019–20 (FY20) to 35.1% in FY25, making it India's largest oil supplier.India has sharply criticised the United States and European Union, accusing them of unfairly singling it out over Russian oil purchases while both continue to trade extensively with Moscow despite the war.In a statement issued earlier this month, India's Foreign Ministry said: 'It is revealing that the very nations criticising India are themselves indulging in trade with Russia.' The ministry added: 'It is unjustified to single out India.'Former Reserve Bank of India Governor Raghuram Rajan told Valor International that stopping purchases of Russian oil would not be a disaster for India, as current prices are not much higher than those for Russian crude. If Russian oil supplies were cut off completely, prices would go up, but India could cope, he said.He said the bigger problem is political. A decision to stop buying from Russia would be seen at home as giving in to U.S. pressure, which is unpopular in any democracy, Rajan said. If Washington had quietly asked India to phase out Russian oil, it might have been acceptable. Making it public and linking it to a tariff threat makes it much harder politically, he added.