October 27, 2026: Indian refiners are increasingly turning to Persian Gulf crude and pulling back from their mainstay supplier Russia, as sky-high freight costs erode the economics of long-haul shipments.

Some Iraqi cargoes are being sold at discounts of more than $25 a barrel to the Dubai benchmark before shipping, according to traders involved in the talks. On a delivered basis, that translates into discounts of several dollars a barrel to Dated Brent. Russian crude, by comparison, is being offered at about a $2 premium to the benchmark, making purchases from India’s biggest supplier uneconomical, the traders said, asking not to be named discussing commercially sensitive information.

“Cargoes from Russia have significantly reduced due to their commercial viability” in November, state-owned refiner Bharat Petroleum Corp.’s Chief Financial Officer Vetsa Ramakrishna Gupta said on an earnings call on Monday. “Due to the increase in freight, we are not getting good offers from Russia.”

The shift extends beyond Iraq. Saudi Aramco’s trading arm recently sold some prompt-loading Khafji crude at discounts of as much as $10 a barrel to the Dubai benchmark, while Abu Dhabi National Oil Co. sold about 20 million barrels of crude earlier this month at a small discount.

(Source: Bloomberg)