Is Russia giving India more discount on oil after Trump tariffs?

Is Russia giving India a bigger discount on its crude oil?

As the Donald Trump administration ratchets up pressure on New Delhi to stop buying crude oil from Moscow, there are reports that Russia is giving India even bigger rebates than before.

The Trump administration, including senior White House staff such as Peter Navarro and Stephen Miller, have been going after India over its trade relationship with Russia.

The development comes in the aftermath of trade talks between the two countries stalling. Trump has imposed a 50 per cent tariff on India – a 25 per cent levy plus an additional 25 per cent for buying Russian crude oil.

But what happened? What do we know?

Let’s take a closer look.

What do we know?

First, let’s take a brief look at Ural oil. It is a blend of oils from Russia’s Urals and Volga regions combined with lighter oil from Western Siberia. Russia uses the Druzhba pipeline to send the oil to Europe and the Novorossiysk pipeline to send it to Azerbaijan.

Both India and China – the top importer of Russian oil and the world’s biggest oil consumer – import the oil via the sea. It is shipped from ports in Western Russia to Asia. As per data from Kpler, China has bought around 50,000 barrels of Ural oil every day in 2025.

There are reports that Russia is offering India a discount of $3–$4 (Rs 262–352) per barrel on its crude oil. R ussia is offering its Ural grade oil at a lower price for cargo loading in late September and October, according to the report.

Last week, Russia was offering a discount of around $2.50 (Rs 220). That discount was just $1 (Rs 88) in July. Meanwhile, the US was shipping crude oil to India at a premium of $3 (Rs 262) per barrel. Last year, Russia was offering India a discount of $4 (Rs 352) per barrel.

Since the Ukraine invasion of 2022, India has emerged as the top importer of Ural oil. This came after Western nations imposed restrictions on Russia’s crude oil in an attempt to limit how much Moscow could earn. Each Urals cargo ranges in size from 700,000 to 1 million barrels.

Russia today accounts for over a third of India’s total oil imports – which are around 5.4 million barrels per day. India imported about 1.8 million barrels per day of Russian crude in the first half of the year, or about 37 per cent of its total, according to data compiled by Kpler.

About 90 per cent of its Russian imports came from Russia’s European ports and were mainly Urals grade. In July, India got over 2 million barrels per day from Russia. Moscow comprised a whopping 41 per cent of its oil imports.

Till June 24, India had bought 231 million barrels of Urals. In May, India’s imports of Russian Ural oil hit a 10-month high. New Delhi bought 74 per cent of Russia’s Ural oil in 2024.

This is a sea change from 2022, when India bought a fraction of its oil from Russia. Instead, New Delhi relied on its traditional sources in West Asia for oil – Iraq, Saudi Arabia, and the UAE.

Navarro was among those in the White House who noted this fact.

“Before Putin invaded Ukraine, India didn’t buy Russian oil to speak of – very, very small amounts. What happened? 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," Navarro said.

However, what Navarro failed to mention was that India did so at the urging of America in order to keep the price of crude oil stable across the world. Experts think that without India’s actions, the price of crude oil could have soared above $200 (Rs 17,600) per barrel.

Navarro also neglected to mention that the US and Europe did not ban Russia from selling its oil. Instead, the West, led by the United States, capped the price of Russian oil. Moscow, in turn, sought to attract new buyers such as China and India by offering deep discounts on its oil.

For example, in 2022, Russia sold crude to India at $60 (Rs 5,255) per barrel. Meanwhile, the price of oil on the benchmark index was at $137 (Rs 12,000) per barrel. Russia over the years continued to sell crude oil to India at a heavy discount – allowing India to save billions of dollars on its oil bill.

While the figures vary, some experts have estimated that India has saved between $7.5 and $33 billion over the years. Others put that figure as low as $2 billion.

India to shell out billions more?

SBI, in a recent report, said India could spend up to $9 billion more on crude oil if it stops buying from Russia. By 2027, that figure could rise to as much as $12 billion.

“If Russian supplies were cut off, India could shift back to its traditional Middle Eastern suppliers under existing annual deals, ensuring flexibility in meeting its import needs,” the SBI wrote. However, other analysts said India’s oil bill could rise as little as $1.5 billion this year.

Regardless, experts say India weaning itself off Russian oil will not be cheap – or easy. They say if India stops buying Russian crude, the price of oil could yet again soar skywards. The price of Brent crude oil, which is at $68 (Rs 6,000) per barrel, could go as high as $90 (Rs 7,900) or $100 (Rs 8,800) per barrel. This, in turn, would increase inflation across the world.

However, India has pushed back against the United States – insisting that it will do nothing to compromise on its national interest.

Russia too has insisted that it will continue to sell oil to India. The Kremlin earlier slammed the United States, saying each nation should be free to choose its own trading partners. China also came to India’s aid on tariffs, calling America a ‘bully’.

With inputs from agencies