Indian Oil Refiners Lose Russian Crude Discounts Amid West Asia Conflict

Indian oil refiners have lost the wide discounts previously available on Russian crude as renewed conflict in West Asia disrupts energy flows. The collapse of a peace memorandum of understanding between the United States and Iran, combined with Houthi attacks on shipping, has caused global oil prices to rise. These disruptions have specifically impacted the Strait of Hormuz and the Red Sea, forcing refiners to prioritize supply security over pricing.

Vetsa Ramakrishna Gupta, Director of Finance at Bharat Petroleum Corporation, noted that discounts for Russian Urals crude, which had reached over $10 per barrel below dated Brent, have disappeared or shifted into premiums. He explained that while volumes remain available—partly because Ukrainian attacks on Russian refineries increased export volumes—no one is currently offering discounts for Russian crude due to recent market developments.

Despite the expiration of a U.S. sanctions waiver on June 17, Indian refiners continue to purchase oil from non-sanctioned Russian entities. The increased cost of crude has pressured the profitability of state-owned companies, contributing to quarterly net losses for both Bharat Petroleum and Hindustan Petroleum Corporation.