New research suggests Russia is continuing to earn huge amounts by selling oil and gas, despite facing tighter sanctions around the world since it invaded Ukraine.
Indian contracts for Urals crude - the type most commonly exported by Russia - for March, April, May and June and projections for deliveries in July and August (around 66.5 million barrels in all) - amounts to more than the quantity purchased during all of 2021, according to Kpler.
According to tanker tracking data in May, Russian oil imports are now the second-largest source for India after imports from Iraq, according to data analytics firm Kpler.
China and India are continuing to increase imports of Russian oil in a dramatic reshaping of global trade in energy, according to the latest industry data. But the ability of Asia to absorb more production will be tested as the European Union winds down imports from Russia in response to the invasion of Ukraine.
India is looking to double down on its Russian oil imports with state-owned refiners eager to take more heavily-discounted supplies from Rosneft PJSC as international buyers turn down dealings with Moscow over its invasion of Ukraine, reported Bloomberg.
State processors are collectively working on finalizing and securing new six-month supply contracts for Russian crude to India. Cargoes are being sought on a delivered basis from Rosneft, with the seller set to handle shipping and insurance matters, they said.
India, an oil-hungry country of 1.4 billion people, has guzzled nearly 60 million barrels of Russian oil in 2022 so far, compared with 12 million barrels in all of 2021, according to commodity data firm Kpler. Shipments to other Asian countries, like China, have also increased in recent months but to a lesser extent.
Such sales are boosting Russian export revenues at a time when Washington and allies are trying to limit financial flows supporting Moscow’s war effort.
India is the world's third-largest consumer of oil and over 80% of it is imported.
Historically, Russia has not been a major supplier to India. In January and February this year, India did not import any crude from Russia at all. But in March, imports began to rise.
Last year, India's top three suppliers were in the Middle East, followed by the US and Nigeria. Only around 2% of total oil imports (12 million barrels of Urals crude) came from Russia, according to Kpler.
Chinese state-owned and independent refiners also have stepped up purchases. In 2021, China was the largest single buyer of Russian oil, taking 1.6 million barrels per day on average, equally divided between pipeline and seaborne routes, according to the International Energy Agency.
While India’s imports are still only about a quarter of that, the sharp increase since the war began is a potential source of friction between Washington and New Delhi.
The U.S. recognizes India’s need for affordable energy, but “we’re looking to allies and partners not to increase their purchases of Russian energy,” Secretary of State Antony Blinken said after a meeting of U.S. and Indian foreign and defense ministers in April.
Meanwhile, the U.S. and its European allies are engaged in “extremely active” discussions on coordinating measures, perhaps forming a cartel, to try to set a price cap on Russian oil, Treasury Secretary Janet Yellen told a Senate Finance Committee meeting on Tuesday.
The aim would be to keep Russian oil flowing into the global market to prevent crude oil prices, already up 60% this year, from surging still higher, she said.
“Absolutely, the objective is to limit the revenue going to Russia,” Yellen said, indicating the exact strategy had not yet been decided on.
India has further benefited from discounted Russian oil and coal since the outbreak of war. Although External Affairs Minister S. Jaishankar quipped in April that India probably imports less Russian oil in a month than Europe does in an afternoon, New Delhi’s oil imports from Russia rose sharply following Western-led sanctioning of Moscow.
The same is true for coal, where India’s stocks may be running alarmingly low. India is certainly grateful to have Russian energy to fuel its development.
Western criticism of these imports, coming after decades of haranguing India on fossil fuel emissions, has only irritated the world’s largest post-colonial state—one that still holds deep sensitivities when rich, majority-white nations appear to tell it to abandon its national interest in energy security and energy-fueled development.
(with inputs from AP)