On the dock, Brent’s premium is $29, not $12. And Washington has moved on India’s diesel

The oil number of the week was $12, the premium of Brent over American crude. It is the wrong number for India. On the dock, where India buys, the premium is $29. And on Friday Washington moved on the one oil price that has been working in India’s favour.

The $12 is a futures price. Brent for delivery next month closed on Friday at $103.81 a barrel and American crude at $91.13, a gap of $12.68 and the widest since March. Futures are promises of oil later. The oil itself costs more. By the daily table of America’s Energy Information Administration, a physical cargo of Brent fetched $125.44 on 6 October, the latest day it has published, and American crude at its hub in Oklahoma fetched $96.24. That gap is $29.20. Two trading days earlier it touched $37.62, wider than on any day since at least 2010 bar one: the session in April 2020 when American crude went below zero.

On 27 February, the day before the war with Iran began, the physical gap was $4.36. It has multiplied nearly seven times, while the futures gap has little more than doubled, from $5.46. The difference between the two is what the world pays to have oil now and not next month: on 6 October a cargo of Brent cost $25.23 more than the futures contract.

India buys cargoes, not contracts: 5.26 million barrels a day in September, a record, by the figure The Economic Times carried last week. On that volume the physical gap of 6 October is worth $153.6 million a day, about ₹1,481 crore. It is not a saving India could bank by changing suppliers. It is the measure of what the war adds to the oil of everyone who is not America.

The price India has been earning

The second price is diesel, and here India has been on the winning side. Attacks on refineries in Russia and the Gulf, and export curbs in Russia and China, have left the world short of it. India’s refiners shipped about 2.5 million tonnes abroad in September, the most in a year, BusinessLine reported, citing traders and the data firm Kpler. The margin on a barrel of diesel in Singapore passed $60 that month; Goldman Sachs puts the usual level near $20. India burnt 7 million tonnes of diesel at home in August. For every three tonnes used in the country, roughly one more left by ship.

That is the trade Washington moved on. American diesel reached a record $6.52 a gallon on 22 September and stood at $6.28 on Friday, with congressional elections due on 3 November. After a call with Vladimir Putin, Donald Trump announced that Russia would supply more than 300,000 tons at once, 500,000 in November, a million after that and 3 million more as its refineries allow. Russia, which had banned diesel exports since July, partly lifted the ban on Saturday.

Measured in tonnage, the deal is modest. All of it, 4.8 million tons by the White House’s count, is less than two months of India’s exports at September’s pace. The first instalment is what Indian refiners ship in under four days.

A licence wider than the deal

Measured on paper, it is much larger. The licence the American Treasury issued that afternoon, General License 135, names no buyer, no destination and no quantity. It authorises every transaction “related to the sale, delivery, offloading, or importation” of diesel of Russian origin, into the United States or anywhere else, until 7 April 2027. That is 180 days in which Russian diesel is clear of those American sanctions rules for whoever handles it. Russian crude is not mentioned.

For India that omission is the point. Three weeks earlier Mr Trump signed a law that directs tariffs of up to 100% on the goods of the five largest importers of Russian crude or gas if they keep buying, and India, with China the biggest buyer of Russian crude, is exposed to it. Its refiners have already pulled back. Russia’s share of India’s crude imports fell from 56% in July to 35% in September, by Kpler’s count, first for fear of that law and now for price as well: Russian barrels that once sold at a discount are offered at more than $10 above Brent.

So the crude India buys from Russia stays under threat, and the diesel Russia makes for itself has been waved through. A country that has spent the war turning imported crude into the world’s scarcest fuel has been handed a competitor by the government that was pressing it to stop buying.

Who holds which price

Inside India the two prices fall on different companies. Reliance Industries earned 36% of its revenue abroad last year. Indian Oil earned 5% and Hindustan Petroleum less than 3%. The exporters collect the diesel premium. The state retailers sell at the pump, where prices in the big cities have barely moved since June, and pay the crude premium. Moody’s told BusinessLine last week that this cannot last: either the companies are given fresh capital to carry the losses or they are allowed to raise prices.

Those losses have an address. The Government of India owns 51.5% of Indian Oil and 52.98% of Bharat Petroleum. It owns 58.89% of ONGC, which in turn owns 54.9% of Hindustan Petroleum. Life Insurance Corporation is the largest institutional shareholder of Indian Oil and of ONGC, and of Reliance too, so it holds both sides of the trade. From Monday the three retailers buy their dollars at a special window of the Reserve Bank instead of in the market.

Who is being protected is just as plain. In the official tables of what each industry buys, fuel is 54.7% of everything the land transport industry purchases, and that industry, mostly trucks and buses, takes 39% of all the petroleum products sold to business. Iron-ore mines are at 56.7%. Fishing is at 11% and farming at 9%. As long as the pump price holds, the war’s oil has not reached them. When it moves, they are first.

Three dates are fixed. On Monday the Reserve Bank’s window opens. On 3 November America votes, and members of Mr Trump’s own party say they will bring a bill to stop the diesel deal. On 7 April the licence lapses unless it is renewed. Between them sit two numbers: the gap between Brent and American crude on the dock, which says what India pays, and the price of diesel abroad, which says what India earns. This month the first reached its widest of the war and the second was put on notice.

Data note: Futures prices are front-month closes. Physical prices are the daily spot prices published by the US Energy Information Administration (Brent, Europe; West Texas Intermediate, Cushing), which run to 6 October; the gaps and their history are our arithmetic on both. The licence is the US Treasury’s General License No. 135 of 9 October 2026, read in full. The volumes of the deal, American diesel prices, the sanctions law and Russia’s export ban are as reported by the Associated Press, CNBC, Business Standard and The Economic Times between 9 and 11 October. India’s diesel exports, the Singapore margin and Russia’s share of India’s crude are Kpler figures as reported by BusinessLine and The Economic Times; the usual margin is Goldman Sachs’s as reported by CNBC. Diesel used in India is from the oil ministry’s Petroleum Planning and Analysis Cell. Revenue abroad is from the companies’ annual reports for the year to March 2026; shareholdings are from their filings for 30 June 2026. The shares of fuel in each industry’s purchases are from the official supply and use tables for 2023-24. The rupee amount uses the European Central Bank’s reference rates of 6 October 2026.

Institutional perspective: For holders of India’s refiners, exporters carry the price of diesel abroad and the state retailers carry the price of crude and the pump. The dates are 12 October, 3 November and 7 April 2027.