Rising prices cap India’s thirst for Russian oil
Since the invasion of Ukraine two years ago, India has bought hundreds of millions of barrels of cut-price Russian crude, saving itself billions of dollars while bolstering Moscow’s war coffers.
NEW DELHI: Indian purchases of Russian crude in defiance of Western pressure over the Ukraine war have fallen to an 11-month low as the price tag on the discounted oil rises, figures show.
Since the invasion of Ukraine nearly two years ago, India has bought hundreds of millions of barrels of cut-price Russian crude, saving itself billions of dollars while bolstering Moscow’s war coffers.
The purchases have catapulted it to second place among Russia’s customers behind China, and Indian officials have made no secret of their decision to prioritise national interest over international sanctions against Moscow.
But the price of Russian crude has risen in the face of OPEC+ production cuts and increased demand from China, analysts say, making it less attractive to Indian customers.
Indian refiners bought 1.45 million barrels per day of Russian oil last month, their lowest amount since last January and down nearly 16 percent from November, according to global energy trade intelligence platform Kpler.
The “interplay between India and China” was a key driver of the change, Viktor Katona, lead crude analyst at Kpler told AFP, “as both countries now vie for the same barrels”.
The biggest beneficiary of the change is Moscow: Russian crude has been trading above $85 per barrel, reports say, even though a coalition of the G7, EU and Australia imposed a $60 price cap a year ago.
New Delhi’s reduced imports will be welcomed by some European policymakers who have raised concerns over how Indian refiners have processed Russian crude into fuel for the European market, effectively bypassing the EU’s sanctions.
New Delhi and Moscow have ties dating back to the Cold War, and Russia remains by far the biggest arms supplier to the world’s most populous country.
India has shied away from explicit condemnations of Russia over its invasion of Ukraine, even as it pursues greater security ties with the United States.
But instead of following in the West’s footsteps, it has doubled down on its historical partnership with Russia to secure cheap energy, to help it boost growth without running up its fiscal deficit.
Russia has become India’s top oil supplier, overtaking the traditional heavyweight Middle Eastern exporters, and remains so by a distance despite the recent falls.
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