India's imports of Russian oil doubled, likely to remain high - Media
Kyiv • UNN
The US Treasury extended the permit for the purchase of Russian oil until May 16. In March, India's fuel imports from Russia doubled, reaching $6.2 billion.
The US extension of a temporary waiver for countries buying Russian oil is expected to benefit India, which became one of the largest buyers of Russian oil in March due to the war with Iran, Nikkei Asia reports, writes UNN.
Details
The US Treasury Department last week decided to extend until May 16 the authorization to purchase sanctioned Russian oil and petroleum products already loaded on vessels at sea as of April 17. This move, which excludes transactions involving certain regions such as Iran, Cuba, and North Korea, replaces a previously active authorization that expired on April 11.
Before the war in Ukraine, Russia accounted for only 0.2% of India's total oil imports. After the war began in February 2022, New Delhi became one of the largest buyers of Russian oil at discounted prices, before reducing purchase volumes late last year in response to US tariffs and sanctions by US President Donald Trump against Russian oil companies Rosneft and Lukoil. Now, thanks to the exceptions granted by the US in connection with the Iranian crisis, India's purchase of Russian oil has again significantly increased.
Monthly imports of Russian oil to India doubled in volume and almost quadrupled in value in March, reaching 5.3 billion euros (6.2 billion dollars) compared to 1.4 billion euros in February, while the total volume of oil imports to this South Asian country decreased by 4%
"The biggest shift occurred in oil imports from Russia by state-owned refineries, which increased by as much as 148%, likely due to the greater availability of Russian oil on the spot market, which is their main source of imports," the report says. Last month, India purchased 38% of Russia's total oil exports, becoming Moscow's second-largest buyer after China, which purchased 51%.
Indian refineries were among the first to receive US authorization in early March to purchase Russian oil. US Treasury Secretary Scott Bessent stated that the move was aimed at ensuring an uninterrupted supply of oil to the global market. He then wrote on social media: "This temporary measure will ease the pressure caused by Iran's attempt to seize the global energy market."
"Our priority is to ensure energy supply so that we can meet domestic demand," Sujata Sharma, a senior official at the country's Ministry of Petroleum and Natural Gas, told reporters earlier this month, without naming the supplier country. "What oil we buy is determined by technical and commercial feasibility and the commercial sense it makes for our refineries."
For India, which imports about 90% of its oil, the Middle East and Russia are key sources. Both these regions, as Ajay Srivastava, founder of the New Delhi-based Global Trade Research Initiative, pointed out, "are prone to geopolitical tensions, making India vulnerable to disruptions, price spikes, and inflation."
Prarna Gandhi, a research fellow at the Vivekananda International Foundation think tank in India, said that despite higher transportation costs due to the so-called "shadow fleet," Russian oil remains the most profitable and pragmatic option to meet India's energy needs at this time.
"Even if the conflict in West Asia ends tomorrow, normalization in insurance and, consequently, shipping is still very far from complete. Insurers will need months to verify the demining of the Strait of Hormuz before lifting additional war risk surcharges," she said.
"Russia filled approximately 47% of India's [oil import] basket in March," she said. "Supplies from Russia will remain absolutely significant, as there are very few alternatives for India to obtain energy in the large, necessary volumes via a non-Hormuz route."