Replacing Saudi crude is easy, replacing the discount is not

Economy No. 15 17 September 2026 · 1 min read

Saudi Aramco has reportedly stopped selling crude to Indian refiners until further notice. In August, Saudi Arabia supplied 350,000 barrels a day, about 7.6% of India's imports.

That sounds like the problem. But it isn't. India has already replaced more oil than that in a single month. Russian oil fell from 2.82 million barrels a day in July to 2.08 million in August. The UAE, Iraq and Kuwait picked up some of the gap. Total imports still fell 8% to 4.62 million barrels a day.

Finding cheap oil is still a problem. In early July, Russian Urals was more than $10 a barrel cheaper than Brent. By the end of the month, that discount had shrunk to just $1 to $2.

India paid $63.4bn for 82 million tonnes of crude between April and July, against $40.5bn for the same volume a year earlier. That is roughly $106 against $68 a barrel.

India's strategic reserves held 3.37 million tonnes in March, or roughly 25 million barrels. At today's import rate, that is only about five days of imports.

India's oil buffer is five days, not seventy four: the crude actually in the strategic caverns in March 2026, 3.372 million tonnes or 64% of capacity, covers 5.0 days of imports, against the ministry's 9.5 day figure, the 74 days of national storage capacity and the IEA's 90 day benchmark.

India's mix moved more in a month than Aramco supplies: between July and August 2026 crude imports fell from Russia 2,820 to 2,080 thousand barrels a day and from Saudi Arabia 415 to 350, while the UAE rose 470 to 520. Total imports fell from 5.04 to 4.62 million barrels a day.

Sources