Brent crude price fell on Tuesday because of concerns over a global slowdown and depressed demand from oil guzzler China on account of a spate of Covid-lockdowns.

Besides, Saudi Aramco cut its Asian premium for June shipments to $4.40 a barrel from $9.35 in May, which added to market jitters. Sources said India will continue to lap up Russian Ural crude available at a discount, while continuing to buy oil from Saudi Arabia.

The cut in premium would partially offset the depreciation in the Indian rupee against the dollar.

July Brent oil futures were at $103.26, down by 2.5 per cent, on Tuesday on concerns over a higher interest rate, the strengthening of the dollar and a slowdown in the global economy.

Prashant Vashist, energy analyst at Icra, said: “Russian Ural crude continues to be attractive to Indian buyers even after the cut in Asian premium by Aramco.” Analysts said the storage tanks of Russia are full and they are selling oil at a discount.

Moreover, the sanctions and uncertainty has made the Russian crude attractive to Indian refiners.

According to S&P Global, the Urals has been trading at record lows in recent weeks, with some deals at a discount of almost $40 a barrel to the Platts Dated Brent crude oil benchmark.

The price of Russian Urals CIF Rotterdam averaged $69.89 a barrel in April, according to Platts data. This compares with a monthly average of $104.40 for the UK's Forties, which is similar in quality to Urals.

Sources said there are the logistics and risk costs that needed to be added to the crude price. But, for the present the Russian crude with discounts is attractive.

“These imports are merely opportunistic buys because of the availability of Urals crude, and some discounts. Otherwise, Russian crude is bad economics for Indian refiners. The distances to transport it are huge, shipping times long, freight is expensive. That’s why Russia in India’s crude import basket had been 1 per cent or less all these years,” they said.

India’s purchases of Russian crude have soared since the Ukraine war started on February 24, rising from nothing in December and January to about 300,000 barrels a day in March and 700,000 a day in April.

The crude now accounts for nearly 17 per cent of India’s imports, up from less than 1 per cent before the war. Last year, India imported about 33,000 barrels a day on average from Russia, reports said.

The crude import bill for 2021-22 nearly doubled to $119 billion.