Indian refiners continue to import cheap Russian oil, taking advantage of discounts offered by Moscow in the wake of Western sanctions in response to its invasion of Ukraine.
India’s imports of Russian oil hit a record level in February 2023, keeping New Delhi the largest single supplier of oil for the fifth consecutive month, according to energy shipment tracker Vortexa.
Russia’s share of India’s imports rose to 35%, to 1.62 million barrels per day in February 2023, and is now higher than the combined imports of traditional suppliers Iraq and Saudi Arabia, according to information seen by the specialized energy platform, according to The Economic Times. (The Economic Times).
Russia is selling record quantities of crude oil to India to plug the gap in its energy exports, after the European Union banned seaborne imports of Russian oil and imposed a ceiling of $60 per barrel in December 2022.
Indian refineries use UAE dirhams to pay for imported Russian oil, with an industry official confirming that “nearly a quarter of Russian imports are now paid for in dirhams”.
India’s oil imports
The rise in India’s oil imports from Russia came at the expense of Saudi Arabia and the United States. Oil imports from Saudi Arabia decreased by 16% on a monthly basis, and imports from America decreased by 38%.
According to shipping company Vortexa, Russia now accounts for more oil bought from Iraq and Saudi Arabia combined, which is at a 16-month low.
Iraq – which was overthrown by Russia to become India’s largest oil exporter – supplied about 939.9 thousand barrels per day of oil in February, while Saudi Arabia exported to India about 647.8 thousand barrels per day of oil.
The UAE overtook the United States to become the fourth largest supplier, at 404.6 thousand barrels per day.
The United States exported 248.4 thousand barrels per day, down from 399.9 thousand barrels per day in January.
Russian oil to India
In response to India’s relations with Russia and the purchase of Russian oil, the United States emphasized that “every country will make its own decision”.
“We understand that each country will of course make its own decisions,” said the first deputy spokesperson for the US State Department, Vedant Patel, according to statements seen by the specialized energy platform, quoting the “Newsroom Post” platform.
He added – in an interview with the Asia News Agency International -: “The only thing we were clear about with regard to Moscow, specifically Russian energy sales, is why we are such big advocates of capping oil prices?”
This is because, he explained, “what a price ceiling does is it keeps the oil and energy flowing into the market and makes sure that supply meets demand, but it also ensures that Russia doesn’t get a windfall to fund its war machine.”
The following graph – prepared by the Energy Research Unit – shows Russian oil exports in 2022:
The importance of US-Indian relations
Asked about India’s stance on recent international events, including the conflict in Ukraine, Vedant Patil emphasized that New Delhi has played an incredible role and has an “ambitious plan” for its G20 presidency.
“I think India has played a very important role,” he said. “You have to remember that one of the main things in 2023 is that India has the presidency of the G-20, and it has a very ambitious plan. The United States is ready to share it with them in achieving that.”
“Regarding Ukraine, I’ve seen Prime Minister Narendra Modi and External Affairs Minister Jaishankar very clear that this is not the time for war, that there has to be a resolution in accordance with the UN Charter, these are all values we share too,” he added.
Describing the Indo-US relationship as “one of the most important bilateral relations,” Vedant Patel emphasized that India is an important partner for the United States in various sectors, including maintaining the rules-based order and shared vision for a free and open Indo-Pacific.
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