New Delhi, September 2, 2025: Russia’s oil discounts for India have deepened, with Urals crude now trading at $3–4 per barrel below Brent, making it cheaper than American alternatives. The widening price gap comes as the Trump administration slaps a 50% tariff on Indian imports of Russian oil, intensifying the diplomatic clash between Washington and New Delhi.
Russian Oil Now Significantly Cheaper
According to Bloomberg, shipments of Urals crude scheduled for late September and October are being offered at record discounts. Just last week, the gap was $2.50 per barrel, compared to only $1 in July. In contrast, US crude delivered to India carries a $3 premium over Brent, tilting the economics decisively in Moscow’s favor.
For Indian refiners, the calculation is simple: Russian barrels not only undercut US supplies but also boost refining margins when re-exported to Europe, Africa, and Asia.
US Pressure Mounts
The Trump White House has accused India of indirectly funding Russia’s war in Ukraine by continuing to purchase discounted crude.
“Before Putin invaded Ukraine, India didn’t buy Russian oil to speak of—very, very small amounts. Now, Russian refiners provide discounts, India refines it, and then sells it at a premium to Europe, Africa, and Asia. It fuels the Russian war machine,” said Trump’s trade adviser Peter Navarro in defense of the tariffs.
The 50% levy is the harshest penalty Washington has imposed on New Delhi since the Ukraine war began, underscoring the growing friction in an otherwise close relationship.
India’s Energy Realpolitik
India, the world’s third-largest oil importer, has dramatically reoriented its energy basket since 2022. Russian crude, which accounted for less than 1% of imports pre-war, now makes up nearly 40% of India’s oil supply.
For New Delhi, the decision is framed as economic pragmatism rather than geopolitics:
- Russian oil keeps domestic fuel prices stable.
- Refining margins boost India’s export revenues.
- Diversification reduces dependence on Middle Eastern suppliers.
A Diplomatic Standoff in the Making
The US insists India’s purchases undermine sanctions and strengthen Moscow. India counters that its policy is driven by energy security and affordability for 1.4 billion people.
As discounts widen further, India appears unlikely to yield to US pressure anytime soon—signaling that the energy equation may become the new flashpoint in India-US ties.
