Indian Oil and BPCL Restart Buying Russian Oil as Discounts Return

Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) had stopped importing Russian oil in July 2025. The main reasons were shrinking price discounts and growing criticism from the U.S. over India’s trade with Moscow.

Discounts Attract Refiners Again

Now, with discounts on Russia’s Urals crude widening to around $3 per barrel, both refiners have resumed purchases for September and October delivery. IOC has also bought other Russian grades such as Varandey and Siberian Light. Currently, IOC is securing Russian crude at a $1.5 per barrel discount compared to the Dubai benchmark.

U.S. Pressure and Tariff Threats

The U.S. has criticized India’s Russian oil imports, saying they indirectly help fund the war in Ukraine. President Donald Trump recently announced an additional 25% tariff on Indian goods starting August 28, as a penalty for these purchases. However, Washington has not imposed similar tariffs on China, even though it also buys Russian crude.

India’s Position

IOC clarified that buying Russian oil is a business decision and that the government has not directed it either way. In FY25, 22% of IOC’s crude supply came from Russia, rising to around 24% in FY26. The company also announced plans to invest ₹34,000 crore in refinery expansion projects in Panipat and Vadodara.

Russia’s Assurance

The Russian embassy in New Delhi confirmed that Moscow will continue oil supplies to India. Russian Deputy Chief of Mission Roman Babushkin called U.S. pressure on India “unjustified” and “unilateral.” He also said President Vladimir Putin will meet Prime Minister Narendra Modi in New Delhi before the end of the year.

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EU Action Against Nayara Energy

Meanwhile, the European Union has sanctioned Russian-backed Indian refiner Nayara Energy. As a result, the company has scaled down operations, and several trading partners have reduced business with it.

Conclusion

India’s decision to resume Russian oil imports highlights the importance of cost efficiency in energy security. Despite U.S. pressure and fresh tariffs, Indian refiners continue to prioritize discounted crude, while Russia reaffirms its commitment to long-term energy ties with India.

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