India finds Russian oil an irresistible deal, no matter the diplomatic cost
India finds Russian oil an irresistible deal, no matter the diplomatic cost
One by one, the application has flowed to India. Buying Russian oil, President Joe Biden told the Prime Minister of India, not in the interests of your country. Undermined sanctions, a US official who clearly warned, could bring “consequences.” Taking a more difficult line in Russia, the Parade of American and European envoys believes, is a global necessity.
But for India, the decision to remain closely in its neutrality in the Russian War in Ukraine is no longer only about maintaining his choice in the world with many centers of power. This has developed into a favorable case of economic opportunism: Russian oil is too good to miss.
The purchase of Russian Indian crude oil has jumped since the conflict began, up from zero in December and January to around 300,000 barrels per day in March and 700,000 a day in April. Crude oil now accounts for almost 17% of India’s imports, up from less than 1% before the invasion. Last year, India imported around 33,000 barrels per day on average from Russia.
With Russian oil prohibited in the United States and Europe now proposing its own embargo, India can buy crude oil at large discounts, strengthen the energy thirst economy at a lower cost. Indian refiners can also use crude oil to make products such as diesel and jet fuel and sell them with better margins than usual abroad.
When India uses the war to help trigger post-ending economic recovery, trade between it and Russia is likely to increase with continuing conflicts, analysts said. It can further complicate the efforts of America and Europe to suffocate the blood of the Russian economy and breastfeed US-Indian relations when the two countries try to work together to fight China.If oil is available and with a discount, why don’t I buy it? I need it for my people, “Nirmala Sitharaman, Minister of Finance of India, said last month.
The surface re -exporting Russian oil became a few clear days after President Vladimir Putin launched his attack in Ukraine at the end of February, as a tanker traffic that used to go from the Russian terminal in the Black Sea to Northern Europe which bent instead to India.
The traffic could be busier after the European Union announced on Wednesday that they hoped to carry out a ban on Russian oil in the coming months, a step that occurred several days after Russia cuts gas to Poland and Bulgaria, increasing the possibility of an energy war.
Indian -bound tankers are heading to Jamnagar, in the western state of Gujarat, where Reliance Industries has the largest refinery complex in the world, and to Vadinar, also in Gujarat, the location of the refinery owned by Nayara Energy, an Indian affiliate from Rosneft, a state company Russia.
The demand for northwestern Europe is eliminated,” said Viktor Katona, an analyst at the KPler, a company that tracks energy delivery. “That basically has been taken over by India.”
While Europe may move from the purchase of crude oil from Russia, I really want to buy the same oil after being perfected in India – one of the puzzles in the criping of Moscow’s energy income. Indian diesel exports and other processed products to Europe, where they are in a short supply, reaching 219,000 barrels per day, new height, in March, before falling back in April when demand in India jumped.
Simultaneously, the Indian state -owned oil company bought millions of Russian crude oil barrels for the domestic market, which might have helped the Prime Minister Narendra Modi’s government avoid the surge in fuel prices after lifting the freezing in March.
The United States has chosen not to impose harder sanctions that can force countries like India to stop buying Russian crude oil. That attention might reflect concerns in the Biden administration that such a step can further raise the price of pumps for Americans.
The White House seems to refuse the action to close the Indian shelter for Russian homeless barrels,” said Helima Croft, Head of Commodities at RBC Capital Markets, an investment bank, in a note to the client.
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