Amid renewed West Asia conflict, discounts on Russian oil for Indian refiners vanish

📌 Summary:

• Discounts on Russian crude for Indian refiners have vanished again as West Asia conflict resurges and flows through the Strait of Hormuz collapse (only ~10 vessels crossed on July 21 vs pre-war ~140 daily transits)
• Cause: the US-Iran peace MoU (signed June 17) collapsed; renewed disruption of West Asian oil pushed up demand for oil from other regions, eroding the Russian discount
• BPCL says India is still well-supplied — ample non-sanctioned Russian and other crude available; supplies tied up till August-end; refiners now prioritise supply security over price
• US sanctions waiver on Russian oil purchases lapsed June 17, but had "no notable impact": only specific vessels/entities were sanctioned, not Russian oil itself, so India buys from non-sanctioned suppliers
• Russian oil, which had less than 2% share before the Feb 2022 Ukraine war, became India's top crude source after the West shunned Moscow's discounted barrels
• During the West Asia war, Russian discounts (which had widened past $10/barrel to Brent in early July) evaporated and Russian oil even commanded a premium
• Ukrainian attacks on Russian refineries freed up surplus Russian crude for export

🎯 UPSC Relevance: GS3 Economy — India's energy security, import dependence and crude-sourcing strategy; GS2/GS3 impact of West Asia geopolitics and chokepoints on the Indian economy.

📝 Prelims Facts:

• Strait of Hormuz normally carries ~one-fifth of global oil flows; connects Persian Gulf to Gulf of Oman/Arabian Sea
• Russia became India's top crude supplier after Feb 2022; its pre-war share was under 2%
• BPCL is a government-owned (public sector) refiner

🔑 Key Term: Chokepoint — a narrow, strategically critical maritime passage (e.g., Strait of Hormuz) whose disruption can sharply affect global trade and energy prices.