Saturday, 12 Oct, 2024
Since Russia invaded Ukraine in 2022, the West has placed sanctions on the country and set price limitations on oil and oil product loads into Russian ports in an effort to reduce Moscow's oil revenue. Image Source: IANS
In 2023–24, India purchased crude oil valued $132.40 billion as compared to $157.50 billion in 2022–23.
India saved approximately $25 billion of foreign exchange in the year that ended on March 31 compared to 2022–2023 despite importing nearly equal amounts in the two fiscal years, according to government data. This was made possible by Russian crude supply and lower global oil prices. In 2023–24, India purchased crude oil valued $132.40 billion as compared to $157.50 billion in 2022–23. In 2022–2023, the nation imported 232.7 million tonnes (MT) of crude oil; this amount decreased slightly to 232.5 MT by 0.08 percent, but the value of the savings increased by roughly 16 percent.
Source: Ministry of Commerce and Industry
According to tanker data gathered from maritime and trade sources, India's imports of Russian oil reached a nine-month high in April when shipments aboard non-sanctioned tankers run by Sovcomflot, Russia's largest shipping business, restarted. After Washington classified Sovcomflot's ships and its fourteen tankers as violating Western sanctions in February, refiners in India temporarily ceased buying Russian oil in its tankers.
Since Russia invaded Ukraine in 2022, the West has placed sanctions on the country and set price limitations on oil and oil product loads into Russian ports in an effort to reduce Moscow's oil revenue, which is used to finance the war. According to data, Indian refiners imported around 1.8 million barrels per day (bpd) of Russian oil in April, the first month of the fiscal year 2024–2025. This represents an increase of 8.2 percent over the previous month and brings Russia's share of the Indian market to almost 38 percent from 32 percent.
In April, India imported 4.8 million barrels of oil per day, which was slightly more than in April 2023 but a decrease of 6.5 percent over the previous month.
Nonetheless, the statistics indicated that the overall amount of oil purchased by Indian refiners from Saudi Arabia and Iraq during the month was negatively impacted by increasing purchases of Russian oil, causing the share of Middle Eastern oil to drop to 41 percent from 46 percent in March.
The Organisation of the Petroleum Exporting Countries' percentage of India's crude basket fell to 46 percent in April from 53 percent in March due to a decrease in imports from the Middle East.
Increased purchases of Russian oil increased India's imports of oil from the Commonwealth of Independent States, which includes Russia, Kazakhstan, and Azerbaijan, to 41 percent last month from 37 percent in March.
The Centre for Research on Energy and Clean Air, a Helsinki based organisation in its report had said that India is among the top 5 ‘Laundromat’ countries that buy Russian oil and sell processed goods to European nations, thus bypassing the European sanctions against Russia. The 5 Laundromat countries are India, China, Turkey, the UAE and Singapore. According to the report, In the 12 months following Russia's invasion, Western nations that had mainly banned the imports of Russian oil imported oil products from nations that had expanded their imports of Russian crude oil to the tune of EUR 42 billion. The EU, the majority of the G7 nations, and Australia have severely restricted their imports of Russian crude oil and oil products far into the second year of the full-scale invasion of Ukraine.
At the same time, these nations, which are all a part of the price-cap coalition with the aim of limiting Russia's fossil fuel export income, have dramatically expanded their imports of refined oil products from the nations that have grown to be the biggest buyers of Russian crude oil. The report further reveals that the price cap coalition countries increased their imports of refined oil products from China (+3.6 million tons or +94 percent), India (+0.3 million tons or +2 percent), Turkey (+1.8 million tons or +43 percent), the United Arab Emirates (+2.6 million tons or +23 percent), and Singapore (+1.8 million tons or +33 percent) one year after Russia invaded the Ukraine.
India has been highly importing the Russian crude oil since the outbreak of Russia-Ukraine war in February 2022. The western nations had heavily sanctioned Russia and economically isolated it from the rest of the world. At such a point of time, Russia decided to export crude oil at cheaper prices. Both, India and Russia have benefitted from the cheap import of Russian crude oil as New Delhi has been importing oil at very cheaper rates, saving a lot on oil bills and Moscow has been able to counter the sanctions imposed by the western world.
“India will continue to buy oil from Russia", finance minister Nirmala Sitharaman had declared even as the West mounted pressure on New Delhi to isolate Moscow. True to her words, India has not only continued to buy oil at discounted rates from Russia, but has increased the intake by a whopping 4.7 times since April 2022. Not just oil, India-Russia overall trade has increased to a whopping five times since the outbreak of Russia-Ukraine war.
The Indian port of Sikka in Gujarat is the world's largest importer of Russian seab006Frne crude oil and the greatest exporter of oil products to the price cap alliance nations. The refinery at Jamnagar is served by the port. From December 2022 to February 2023, petroleum products worth EUR 2.7 billion were exported from the port to the nations in the price cap coalition.
Despite criticism from the West, India has continued its trade relations with its erstwhile cold war partner. Time and again, India has defended its decision to buy discounted Russian oil citing national interests.
During his visit to Germany for the Munich Security Conference, External Affairs Minister S. Jaishankar said in an interview with the German economic newspaper Handelsblatt that Europe should realise that India cannot perceive Russia in the same way as Europe does. Amidst the ongoing confrontation with Ukraine, he reiterated India's position on purchasing Russian oil in spite of sanctions imposed on Moscow. He stated that Moscow has never harmed New Delhi's interests and that "stable and friendly ties" have always existed between India and Russia.
