Refiners see cost spike as US cracks whip on Russia
New Delhi, Aug. 10 -- India's state-run oil refiners are bracing for higher crude procurement costs and tighter availability as they prepare to buy oil for delivery after September amid the prospect of steep tariffs by the US on countries importing Russian crude, two people aware of the development said. "State-owned refiners have supplies tied up for the next 50 days, so an impact of the bill is not expected immediately," an executive with a refiner said, requesting anonymity.
"Tenders are likely to be floated around mid-August for supplies beyond September. That, however, needs to be seen as to what is the availability and also the pricing."
The concern follows the US Senate's passage of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 on Friday, which will be taken up in the House of Representatives next month after the Congress returns from its summer recess.
The Act empowers the US president to impose tariffs of up to 100% on countries that are among the top five importers of Russian oil and gas, including China and India, which is the world's third-largest oil importer and fourth-largest refiner. Russian crude accounts for about 48% of imports by India's state-run refiners.
India may fall back on West Asian crude if Russian oil is sanctioned, but the cost of the barrels which are coming in through the Suez Canal would be higher because the route is longer, while elevated insurance premiums are also affecting shipments on routes outside the Strait of Hormuz due to the ongoing West Asia conflict.
A second person aware of developments said expensive spot purchases already account for 85% of India's crude imports due to the supply constraints. "Supplies would be somehow secured as oil from Venezuela, the US, UAE and Oman are expected to come in, but pricing will be the key concern."
India's crude oil import bill has already surged 60% year-on-year to nearly $49.8 billion in the April-June quarter, even as import volumes fell to around 60 million tonnes from 62.6 million tonnes a year ago, suggesting that higher prices rather than demand were the main driver of the increase.
Queries emailed to the Union ministry of petroleum and natural gas and the state-run refiners remained unanswered till press time....
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