Priyanka Tiwari
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Suspense crime, Digital Desk : The era of deep discounts on Russian crude oil, which has significantly benefited India over the past year, appears to be drawing to a close. Starting in August, India is expected to pay a higher price for its Russian oil imports, as a combination of rising shipping costs and strengthening global demand erodes the price advantage that made the barrels so attractive.
For months, Indian refineries have enjoyed a substantial discount on Russian Urals crude compared to global benchmarks like Brent. This arrangement helped cushion India's economy from volatile global energy prices and manage inflation. However, that favorable dynamic is now shifting due to two key factors.
First, the cost of shipping oil from Russian ports to India has increased. These higher freight and insurance charges are eating directly into the initial discount, reducing the net savings for Indian importers.
Second, Russia is finding a broader market for its oil. With increased demand from other global buyers, Moscow is no longer under pressure to offer the steep price cuts it once did to secure sales. As the competition for Russian barrels grows, the seller is naturally able to command a higher price, closing the gap with other international grades.
This development presents a new challenge for India's economic policymakers. As the nation's largest single supplier of crude, a rise in the cost of Russian oil will directly impact India's import bill, potentially widening the trade deficit. Furthermore, it could exert upward pressure on domestic fuel prices, reigniting inflationary concerns.
While Russian oil is still expected to trade at some discount to Brent, the significant bargain India once enjoyed is diminishing, forcing refineries and the government to reassess their energy procurement strategy in the months ahead.
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