Studying implications of US sanctions, says India amid decline in Russian oil buy
India is studying implications of US sanctions on Russian oil companies, and its decisions would take into account the evolving dynamics of the global market
NEW DELHI: India said on Thursday that its crude oil procurements are guided by the objective of securing “affordable energy from diverse sources” to ensure energy security, amid indications that refiners are gradually reducing the uptake of Russian energy and eyeing greater imports of oil and gas from the US.
With President Donald Trump focused on efforts to end the conflict between Russia and Ukraine, India has faced renewed pressure from the US and its European allies to cut down on Russian oil purchases, especially after American sanctions hit Russian energy majors Rosneft and Lukoil, which were among the leading suppliers to Indian refiners.
“Our position on the larger question of energy sourcing is well known. In this endeavour, we are guided by the imperative to secure affordable energy from diverse sources to meet the energy security needs of our 1.4 billion people,” external affairs ministry spokesperson Randhir Jaiswal told a weekly media briefing.
Jaiswal said the Indian side is studying the implications of recent US sanctions on Russian oil companies. “Our decisions naturally take into account the evolving dynamics of the global market,” he said.
India and the US, he added, continue to remain engaged on finalising a bilateral trade deal. “Both sides are continuing to hold discussions. For any further update, I would refer you to the ministry of commerce,” he said without giving details.
His remarks came a day after Trump told a business forum in South Korea that the US is “doing a trade deal with India”.
People familiar with the matter said India’s procurement of Russian crude has declined following the latest US sanctions on the two Russian oil producers, but ruled out the possibility of energy imports going down to zero.
The latest sanctions by the US and the European Union (EU) came a little more than a month ahead of a planned visit by Russian President Vladimir Putin to New Delhi for an annual summit with Prime Minister Narendra Modi.
According to Bloomberg ship-tracking data, flows of Russian oil bound for Indian ports fell to 790,000 barrels a day in the four weeks to October 16. This was half of the figure for a similar period to October 5, when it was 1.43 million barrels a day. The highest figure for this year was 1.97 million barrels a day for the four weeks to March 30.
Indian refiners haven’t placed new orders for Russian crude after the US slapped sanctions on Rosneft and Lukoil last week, even as they took steps to ensure that they don’t fall foul of international obligations. However, there were also signs that Russian energy imports wouldn’t completely stop, with Indian Oil Corporation (IOC), the country’s largest oil refiner, saying on Tuesday that it would “absolutely not” halt buying Russian crude while it complies with international sanctions.
“We are absolutely not going to discontinue (buying Russian oil) as long as we are complying with the sanctions. Russian crude is not sanctioned. It is the entities and the shipping lines which have [been hit by] sanctions,” Anuj Jain, IOC’s director (finance), said in an analysts’ call.
The people cited above said, on condition of anonymity, that Indian importers were considering procuring Russian oil through intermediaries and from firms that Western sanctions hadn’t targeted. Most of the sanctions targeted specific oil producers and firms providing services such as shipping and insurance, they noted.
However, Trump has repeatedly claimed that he had been told by India’s leadership, including PM Modi, that the country will stop buying Russian oil. After Trump’s first such claim, India said that there had been no such conversation.
The US pressure on India to cut back on Russian oil imports, on the grounds that such purchases fuel Russia’s war machine in Ukraine, has exacerbated the strains in the relationship between New Delhi and Washington caused by Trump’s imposition of 50% tariffs on Indian goods, including a 25% penalty on Russian oil purchases.
India has described the US tariffs as “unfair, unjustified and unreasonable” and pointed to double standards, arguing that European countries that continue to buy Russian oil and gas have not faced similar punitive action.
