India’s legitimate energy transactions should not be politicised and countries with oil self-sufficiency or those importing themselves from Russia cannot credibly advocate restrictive trading, sources in the government have said.
This comes against the backdrop of western countries, led by the United States, imposing sanctions on Russia and pressuring New Delhi to restrict trade with Moscow to condemn its invasion of Ukraine.
Earlier this week, after state-run Indian Oil Corp purchased 3 million barrels of Russian crude, the White House stated that while India would not be violating US sanctions by purchasing discounted Russian oil, such a move would be tantamount to supporting Moscow’s aggression in Ukraine.
“Think about where you want to stand when history books are written at this moment in time. Support for the Russian leadership is support for an invasion that obviously is having a devastating impact,” White House press secretary Jen Psaki had said.
India has not supported the Russian invasion of Ukraine. New Delhi has consistently asked all stakeholders to resolve differences through dialogue. It has, however, abstained in all United Nations resolutions against Russia.
HOW WORLD CONSUMES RUSSIAN OIL & GAS
Contrary to the United States’ stance, various countries across the world, particularly Europe, continue to procure Russian oil and gas even today. Notably, around 75 per cent of Russia’s total natural gas exports is to Organisation for Economic Co-operation and Development (OECD), which includes Germany, Italy, France.
European countries like Netherlands, Italy, Poland, Finland, Lithuania, and Romania are also large importers of Russian crude oil.
Notably, recent Western sanctions on Moscow have caveats to avoid impact on energy imports from Russia. Moreover, Russian banks that are the main channels for European Union payments for Russian energy imports have not been excluded from SWIFT international payments system.
RUSSIAN OIL MEETS LESS THAN 1% OF INDIA’S NEEDS
However, crude oil imports from Russia account for less than one per cent of India’s requirement and does not figure among our top ten sources, sources pointed out. Further, there is no government to government arrangement of import between the two countries.
The sources said that recent geopolitical developments have posed significant challenges to India’s energy security. The upswing in oil prices in the wake of the Russia-Ukraine conflict has added to the Indian government’s challenges in sourcing supplies at competitive rates.
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At a time when the Russian economy is reeling under sanctions imposed by the West, Moscow has offered crude oil and other commodities at steeply discounted rates to New Delhi.
India has to keep focusing on competitive energy sources. We welcome such offers from all producers, the government sources said. Indian traders, too, operate in global energy markets to explore best options.
INDIA’S ENERGY SCENARIO
India is highly dependent on imports for meeting its energy requirements. Nearly 85 per cent of our crude oil requirement (5 million barrels a day) has to be imported.
Most of the imports are from West Asia, with Iraq accounting for 23 per cent, Saudi Arabia supplying 18 per cent, and the UAE making up 11 per cent. The US has also become an important crude oil source for India with 7.3 per cent share of total imports.
In the current year, imports from the US are expected to increase substantially, probably by around 11 per cent. Its market share will be 8 per cent.
On Thursday, Ministry of External Affairs spokesperson Arindam Bagchi said India is open to buying crude oil at discounted rates from Russia.
“On imports of energy from Russia let me just highlight that a number of countries are doing so, especially in Europe, and for the moment I’ll leave it at that. We are a major oil importer and we are looking at all options at all points, we need the energy,” said Bagchi.