India’s Russian oil exports to the West

The article examines India’s rising imports of Russian oil and the probable circumvention of Russian oil-related sanctions.

Why is this in the news?

  • An EU parliamentarian accused India of benefitting from cheap Russian energy while indirectly boosting Russia’s economy.
  • India defended its acquisition by emphasising its energy needs as well as the issues of increasing prices as a result of its dependency on energy imports and severe poverty levels.

Sanctions against Russian oil are one of the reasons.

  • Following Russia’s invasion of Ukraine, Western countries and Europe sought to lessen their reliance on Russian energy imports in order to damage Russia’s economy.
  • Germany halted the construction of the Nord Stream natural gas pipeline, and Canada and the United States prohibited the import of Russian crude oil.
  • Russia was sanctioned more severely, including a “price cap” on trading Russian oil above $60 per barrel.
  • The price ceiling was designed to harm Moscow’s economy and limit Moscow’s capacity to pay the Ukrainian war.
  • In response, Russia increased its oil supplies to India and China.

India’s role in supplying the energy needs of the West

  • India, which is free from Russian oil sanctions, has seen a major increase in gasoline imports from Russia, which is subsequently processed and shipped to Europe and the United States.
  • Once refined from Russian crude, the oil is no longer recognised to be of Russian origin.
  • India’s oil imports have assisted it in meeting its own energy needs while also assisting Western nations suffering energy issues as a result of the Russia-Ukraine conflict.
  • India has become a net exporter of refined petroleum products, supplying the West with needed energy.

Imports from India have an impact on Western markets

  • Indian refiners have increased their exports of refined petroleum products, such as diesel and vacuum petrol oil (VGO), to Europe and the United States.
  • VGO is a refining feedstock that can be further processed to generate petrol, diesel and other fuel products.
  • Diesel exports from India to Europe climbed by 12-16% in the previous fiscal year.
  • The United States has emerged as a major destination for Indian VGO shipments, receiving 11,000-12,000 barrels per day (bpd), or 65-81% of India’s VGO exports.
  • These Indian exports have contributed to the alleviation of energy scarcity and supply restrictions in Western markets.
And get notified everytime we publish a new blog post.