Russia oil discount to India shrinks as China sucks supply

India secured discounts of as much as $20 a barrel, which has fallen below $10 and has touched even $5

- Utpal Bhaskar

NEW DELHI : The steep discounts India enjoyed on Russian crude oil through most of FY23 have plunged, two government officials aware of the development said, as China boosted purchases and oil producers cut production.

As Russia scrambled for buyers after its invasion of Ukraine sparked Western sanctions, India stepped up as a new major buyer, securing discounts of as much as $15-20 a barrel. This has since fallen below $10 and has touched even $5, the officials cited above said on the condition of anonymity.

“With Russian oil finding more buyers, the discounts to Indian refiners have been coming down. Earlier, we were getting discounts that varied from cargo to cargo," said one of the two officials cited above, all of whom spoke on condition of anonymity.

Until now, Indian refiners used to get Russian oil at an average discount of $15-20 per barrel on a delivered-at-place (DAP) basis, where the seller bears the transportation risk for delivering at the designated port. This discount varies from cargo to cargo, and a sub-$10 per barrel discount seems to have become the new normal for India, the world’s third-largest oil importer.