India's IOC buys 7 mn barrels US, Abu Dhabi crude amid Russian oil decline

Business Standard

15 hours ago

India's top refiner IOC buys 7 million barrels of crude from US, Canada and Abu Dhabi via tender, as Russian oil imports pause due to narrowing discounts and rising sanctions
Rimjhim Singh New Delhi
India's top oil refiner, Indian Oil Corporation (IOC), has purchased 7 million barrels of crude oil from the US, Canada and West Asia to be delivered in September, news agency Reuters reported. This big purchase comes as Indian refiners slow down buying Russian oil due to smaller discounts.
What IOC bought from three regions
*4.5 million barrels of US crude
*500,000 barrels of Canada's Western Canadian Select (WCS)
*2 million barrels of Das crude from Abu Dhabi
These purchases came through a spot tender, which closed last Friday. Multiple traders handled the deliveries:
*Mercuria will supply two million barrels of the same
*Vitol will supply one million barrels of WTI Midland and WCS
*Trafigura will deliver one million barrels of Das crude
Why it matters
The deal comes as Indian state refiners paused Russian crude purchases due to narrowing price benefits. The US crude became more affordable for Asia recently, opening an opportunity for buyers like IOC.
Reuters quoted two sources as saying that this large purchase was made in part to replace Russian barrels.
India is the third-largest oil importer in the world and one of the biggest buyers of seaborne Russian crude.
Last week, President Trump announced:
*A 25 per cent tariff on all Indian exports to the US starting August 7
*A penalty for India's continued purchases of Russian military and energy equipment
This comes after both nations failed to finalise an interim trade deal despite five rounds of discussions.
Cold pause on Russian crude
The IOC and other state-run refiners like HPCL, BPCL, and MRPL have reportedly not bought Russian oil in the last week, Reuters reported.
This comes at a time when the European Union imposed more sanctions on Russian energy.
Trump slams India-Russia ties
Last week, US President Donald Trump criticised India's trade relationship with Russia. He said, 'I don't care what India does with Russia. They can take their dead economies down together, for all I care.'
On his social media platform Truth Social, Trump also took aim at India's high tariffs: 'Their tariffs are too high, among the highest in the world.' He said this has led to very little business between the US and India.
US sanctions 6 Indian firms over Iran petrochemical trade
Last week, the United States imposed sanctions on six Indian companies for allegedly engaging in multi-million dollar transactions involving Iranian petroleum and petrochemical products, including methanol, polyethylene, and toluene. The action, part of a global crackdown on violations of US sanctions against Iran, freezes these firms' US-based assets and bars American entities from doing business with them.
Alchemical Solutions Pvt Ltd tops the list, accused of importing $84 million worth of Iranian petrochemicals in 2024.