Russian Crude Oil Discount Increases in Midst of Sanctions/Additional Tariffs

August 07, 2025

Despite the current sanctions and imposition of additional 25% on India by President Trump as punishment for continuous import of Russian crude oil, the Russian flagship Urals blend is still trending at a $5 discount.

Following these latest moves by the EU and the U.S., Indian refiners started reducing their intake of Russian crude, which has affected prices, as reported by energy analytics provider Kpler, noting that Indian oil buyers were ramping up purchases of U.S. crude instead.

“Lower demand from Indian refiners is starting to have a strong effect, particularly from state-owned refiners, which are reportedly considering a full pause in imports of Russian oil,” Kpler said.

The company added that “On the other side, private players are still scooping barrels, but at a lower pace. Four Aframaxes are currently waiting to discharge at Jamnagar and Vadinar.”

It would be difficult for Indian refiners and oil traders to completely replace Russian supply, which has come to account for 37% of the country’s oil supply, according to Bloomberg.

Still, Kpler analysts expect the downward trend for Urals to continue as Russian refineries enter maintenance season, increasing the availability of the crude, and “more risk-averse behaviour from Indian state-owned and private refiners” amid President Trump’s tariff actions.

Kpler suggests that the current spat between the U.S. and India could end with a commitment from the latter to buy more U.S. oil but judging by the official statements coming out of New Delhi, this is not the number-one choice for the Indian government right now.

India has already slammed the U.S. for the additional tariffs, which it has called “unfair, unjustified and unreasonable,” noting that “it is revealing that the very nations criticizing India are themselves indulging in trade with Russia.”

Oilprice.com