For India's oil refiners, the Gulf is calling again

Move helps diversification, eases US pressure as Russian discounts shrink

- Rituraj Baruah

India's state-run oil refiners are looking to crank up oil purchases from the UAE, Saudi Arabia, and Iraq amid a standoff with the US over buying Russian oil, two people aware of the matter said.

India has traditionally relied on oil from West Asia, until Russia began offering steep discounts three years ago. Saudi Aramco and Abu Dhabi National Oil Co., the oil champions of Saudi Arabia and the UAE, are among West Asia's top crude oil producers and suppliers.

"Import of Russian oil will continue, but India is also looking at diversifying its imports, and higher supplies from West Asia are being looked at," one of the two people cited above said.

Queries sent to the Union petroleum ministry, Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd, and Hindustan Petroleum Corp. Ltd remained unanswered.

As European countries shunned Russian oil in the wake of the Ukraine war, India stepped into the breach, scooping it up at a steep discount. The discount has narrowed to about $2 per barrel, and India's Russian oil imports have fallen as well. Currently, Russia caters to 36% of India's total oil imports, compared to 2.5% before Russia invaded Ukraine in February 2022.