Russian Oil Discounts Drop Sharply as India Increases Purchases Amid Middle East Tensions

Russian oil exports to India have seen a significant shift in recent weeks, with discounts for Urals crude dropping sharply. According to sources, cargoes of Urals slated for delivery in late August and early September were offered at discounts of $1 to $2 a barrel this week.

This marks a stark change from early July when Russian oil was trading at discounts of over $10 a barrel in India due to abundant Middle Eastern supplies and weaker buying interest from China. However, renewed hostilities in the Iran war and disruptions to shipping through the Strait of Hormuz have led Indian refiners to step up purchases of Russian oil.

Indian refiners have increased their demand for Russian crude, with Russia increasing its oil exports to India to a record 2.64 million barrels per day in June. This accounts for nearly half of India's total imports of 5.24 million barrels per day.