Amid escalating tensions between India and the United States over energy trade, Russia has offered deeper discounts on its flagship Ural crude oil to Indian refiners. According to Bloomberg reports, Moscow is now willing to sell cargoes loading in late September and October at a greater markdown, with discounts widening to $3 to $4 per barrel, compared to the $2.50 discount offered just last week and the $1 markdown in July.
The intensified price cut signals Russia’s ongoing efforts to retain India as a strategic energy partner, particularly at a time when the Kremlin continues to rely heavily on oil and gas revenues to fund its war operations in Ukraine.
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The development comes shortly after the Trump administration in Washington doubled tariffs on Indian goods to 50 percent in retaliation for New Delhi’s continued purchases of Russian oil.
The United States has repeatedly criticised India for what it describes as indirect support of Moscow, arguing that Indian refiners are not only buying discounted Russian crude but also refining and re-exporting petroleum products to Europe, Africa, and Asia at a higher margin.
White House adviser Peter Navarro went so far as to accuse India of actively “fuelling the Russian war machine.” This marks one of the sharpest rhetorical escalations in US-India relations since the Russia-Ukraine war began.
For context, prior to Russia’s invasion of Ukraine in early 2022, India’s imports of Russian oil were negligible. However, as European buyers withdrew due to Western sanctions, India emerged as a major alternative buyer, securing heavily discounted deals that West Asian suppliers could not match.
Over the past two years, Moscow has cultivated India as a reliable purchaser, bundling oil deals with larger geopolitical and economic cooperation frameworks. Today, Russia enjoys its place as one of India’s top three crude suppliers, rivalling both Iraq and Saudi Arabia.
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At a diplomatic level, India has continued to signal its reluctance to bow to Western pressure. During the Shanghai Cooperation Organisation’s annual summit in China, Prime Minister Narendra Modi reaffirmed that the India-Russia relationship is “special”, while also engaging in talks with Chinese President Xi Jinping, highlighting New Delhi’s policy of maintaining multipolar strategic alignments.
This positioning suggests that India prefers to balance its Western partnerships with its traditional ties to Moscow and its complex but necessary engagement with Beijing.
India’s defence against US criticism has been consistent: there are no internationally binding sanctions that prohibit the purchase of Russian crude.
While Washington and Brussels have imposed sanctions on Moscow, New Delhi argues that these restrictions should not automatically extend to all third-party countries. Moreover, Indian officials point out the irony that the United States itself has not fully banned Russian oil trade globally, leaving room for transactions outside of Western jurisdictions.
Economically, Russian crude remains extremely attractive to India. Ural shipments from Russia’s western ports, already among the most competitively priced globally, ensure significant cost savings for refiners who face rising global oil costs.
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By comparison, US crude is trading at a $3 per barrel premium, which makes Russian cargoes an even more practical choice. This aligns with India’s stated policy of prioritising affordable and reliable energy access, especially as domestic demand continues to expand at one of the fastest rates among major economies.
However, the situation also poses risks. Washington’s tariff response signals that India’s increasing tilt toward Russian energy could trigger broader trade consequences.
Tariffs on Indian exports—a pillar of its foreign exchange earnings and job creation—could undermine sectors far beyond energy, such as IT services, textiles, and pharmaceuticals. Additionally, India risks being seen as strengthening a Russia-China axis at the very moment it seeks deeper integration with Western markets through trade and technology cooperation.
Looking forward, the balance between geopolitics and economics will shape New Delhi’s approach. While Russia is offering deeper discounts to retain India’s loyalty, and refiners are likely to seize the opportunity for cheaper oil, the political cost of defying Washington is uncertain.
India is betting that its strategic indispensability—both as the world’s fastest-growing large economy and as a key counterweight to China in Asia—will temper Washington’s punitive measures. Yet, the possibility of escalating tariff wars and pressure from Western partners suggests that India’s oil calculus with Russia could become increasingly complex in the months ahead.
Based On A NDTV Report
Agency
