China and Turkey are boosting purchases of discounted Russian oil, offered at better rates to them for deliveries in September, October and November. This comes after Trump cut off India’s access to the crude by the end of the month, industry officials said, and market data showed. China has increased purchases of Russian Urals crude oil skinfold compared to the first half of this year while India has had to reduce it to nil after Trump slapped secondary tariffs of 25 per cent from August 27 on most Indian exports as penalty for using Russian oil, according to industry data
1. China and Turkey Ramp Up Purchases of Discounted Urals Crude
According to Business Standard, both China and Turkey have increased purchases of discounted Russian Urals crude, particularly for deliveries scheduled in September, October, and November. This move has dampened the upward pressure on oil prices, especially as India’s access to this crude has been curtailed due to U.S. policies.
2. July’s U.S. Sanctions Threat Cast Shadow Over Buyers
Reuters reported in mid-July that President Trump had threatened sanctions on countries buying Russian oil unless Russia agreed to a peace deal. China remained the top importer (mainly via pipelines), while India and Turkey also played significant roles—Turkey, in fact, set a record of about 400,000 barrels per day of Russian oil imports in June, largely driven by lower Urals prices.
3. Market Response to Tariffs on Indian Oil Imports
Another Reuters article from August 11 noted that the broader oil markets remained calm despite threats of a 25% additional tariff on Indian oil imports. Analysts interpreted this muted response as a sign that India may continue to import Russian oil or easily shift to alternative sources without substantial disruption to supply or global prices.
Synthesis & Implications
- Supply Redirection & Price Relief: As India’s access to Urals crude wanes due to U.S. tariffs, China and Turkey have stepped in, taking advantage of generous discounts. This reallocation helps contain further price increases by keeping discounted Russian crude flowing into major Asian markets.
- Strategic Buffer for Global Oil Market: With two heavyweight importers absorbing excess Russian supply, the effects of India's reduced intake are cushioned—alleviating shock to global oil prices.
- Geopolitical Maneuvering: These shifts occur amid a complex backdrop of U.S. sanctions, strategic oil diplomacy, and shifting alliances. Choices by China and Turkey thus serve both economic and geopolitical aims.
