Russia Offers Big Discounts To India On Direct Purchase Of Oil

Synopsis – Reportedly, in the offer Russia is giving flagship Urals grade to India with a discount of over $35 a barrel. In alignment with this, in the contract, Russia wants India to buy over 15 million barrels initially, to begin the contract for this year.

Amidst the continuous jump in the crude oil prices due to the ongoing Russia-Ukraine war that hasn’t left the Indian Oil prices untouched, Russia which already is facing sanctions from the United States (US) and ally countries, has come out to support India by offering a significant discount on the direct sale of oil.

Reportedly, in the offer Russia is giving flagship Urals grade to India with a discount of over $35 a barrel. In alignment with this, in the contract, Russia wants India to buy over 15 million barrels initially, to begin the contract for this year. As per the reports, discussions on the deal are going on at the governmental level.

India ranks 2nd in terms of importing oil and imports over 85 percent of the oil it needs. Currently, oil prices in India have seen a surge amid the ongoing crisis and the dilemma of defying the sanctions. Also, India is among the handful of nations that are doing so. 

The discount will help India control the rise in the prices of oil in India. As per the data, India imported over 193.5 million tonnes of crude oil in the previous financial year till February and spent over $105.8 billion on the same. 

Notably, India is stepping on a bit risky path as it primarily imports most of the oil requirements from the Middle East and the US. 

Kpler in its data states that however India did not import oil from Russia in January and February months but the contract of March and April have already touched six million barrels. 

Though the discount is going to help India in many ways, dropping petroleum prices will have an impact on other activities linked with the production of goods and services.

Currently, fuel prices are above 100 rupees in the metro cities in India. As the national capital, Delhi records petrol price at 101.81 rupees per liter and diesel at INR 93.07 per liter, in the economic capital of India Mumbai, petrol is sold at 116.72 rupees per liter and diesel at INR 100.94 per liter.

Not just India, but right now, most countries across the world are affected due to the crude oil prices as they continue to fluctuate amid the ongoing Russian invasion of Ukraine. The war resulted in crude oil prices crossing the mark of $100 a barrel for the first time in 7 years.