 "Oil refinery, Oil production, Crude oil")
The development has pushed oil as one of the top commodities in the trade ties between India and Russia. (Photo: Bloomberg)
Indian refiners may have been able to save at least $10.5 billion by purchasing Russian oil at discounted prices after the outbreak of the Ukraine war in February 2022.
According to a report by The Indian Express based on the analysis of India’s trade data, Indian refiners ramped up their efforts to buy oil from Russia at discounted costs between April 2022 and May 2024, resulting in savings.
Russia had started offering its crude at discounted prices after the Western nations imposed cuts on their oil imports from Moscow in a bid to put pressure on the Russian economy and curb its offensive in Ukraine.
Russia is India’s top oil supplier
The development has pushed oil as one of the top commodities in the trade ties between India and Russia, with Moscow emerging as New Delhi’s top oil supplier.
Last week, during his visit to Russia, Prime Minister Narendra Modi underscored the significance of this trade partnership, remarking that it brought stability to the international market. In the financial year 2023-24, India oil imports value stood at $139.86 billion, the data suggests.
According to India Express’ report, if the domestic refiners purchased the Russian crude (average per barrel price) at the same rate that they paid for crude from all other suppliers put together, this bill would have surged to $145.29 billion.
In the financial year preceding that, India’s oil imports were 162.21 billion, which would have been an additional $4.87 billion if the average price of the Russian barrels matched those of other suppliers.
India-Russia oil trade and West
India’s oil purchase from Russia has been the subject of criticism from the West. Russia’s biggest foe – the United States – has pushed the Group of Seven nations to cap Moscow’s oil prices to $60 a barrel.
India’s purchase value of oil from Russia exceeds this cap enforced by the West. On this, the US recently remarked that it had not asked India to cut on oil purchases.
“It is important to us to keep the oil supply on the market while limiting (Vladimir) Putin’s profit from it,” Eric Van Nostrand, the US Treasury assistant secretary for economic policy, said in April.
He added that the buyers can negotiate steeper discounts on Russian oil outside of the price cap, as long as they don’t use Western services like insurance and broking – a move, he said, was aimed at limiting Moscow’s sales channels.
First Published: Jul 11 2024 | 2:11 PM IS