MOSCOW (Reuters) -U.S. President Donald Trump‘s demand on India to halt Russian oil imports may threaten billions in Russian revenues, immediate Moscow to retaliate by stopping a serious U.S.-led oil pipeline and probably result in a brand new international provide disaster.
India, the world’s third largest oil importer, has turn into the largest purchaser of Russian oil since 2022, buying as much as 2 million barrels per day of oil accounting for two% of worldwide provide. Different prime consumers are China and Turkey.
The Indian route is so vital for the Kremlin that if disrupted it may immediate it to retaliate by closing the CPC pipeline from Kazakhstan, the place U.S. oil majors Chevron and Exxon maintain large stakes, analysts at JP Morgan stated this week.
“Russia just isn’t with out leverage,” the U.S. financial institution stated.
Trump has threatened to slap tariffs of as much as 100% on nations that purchase Russian oil except Moscow reaches a peace take care of Ukraine by August 7-9. A 25% tariff on all U.S. items imports from India begins on Friday.
Reuters reported on Thursday that Indian state refineries had paused purchases of Russian oil this week amid Trump’s threats.
REALIGNMENT
India solely started shopping for massive portions of oil from Russia, the world’s second largest oil exporter, since 2022. It grew to become a prime importer after Europe, Russia’s former prime consumer, imposed a ban on Russian oil over its navy actions in Ukraine. Russia’s oil large Rosneft has a serious stake in certainly one of India’s greatest oil refineries.
India is now 35% reliant on Russian oil imports price $50.2 billion within the 2024-25 fiscal yr, in accordance with India’s authorities knowledge.
“Slicing off this stream would require a large realignment of commerce flows,” stated Aldo Spanjer from BNP Paribas, including that the worldwide provide was already stretched.
India buys all varieties and grades of Russian oil – together with Urals from Western ports, ESPO and Sokol from the Pacific and a few grades from the Arctic, in accordance with LSEG knowledge.
Urals could be hit hardest if India stops shopping for because it purchases as much as 70% of Russia’s greatest export grade by quantity. India’s oil minister stated the nation can discover various provide.
India would wish to boost imports of U.S. and Center Jap crude or reduce refining runs, resulting in a spike in diesel costs, particularly in Europe, which imports gasoline from India.
“Indian refiners will nonetheless wrestle to switch the heavy high quality of Russian crude so they might find yourself paring runs,” stated Neil Crosby from Sparta Commodities.
FALLING INCOME
Russia has managed to proceed promoting oil since 2022 regardless of worldwide sanctions, though it sells it at reductions to international costs.
