India is the world’s third-largest consumer of energy, relying on imports for nearly 80% of its crude oil requirements. As Russia is being sanctioned from all sides owing to the situation in Ukraine, India has stepped up to buy Russian oil at a huge discount despite threats from the US.
According to regional media on Thursday, India’s state-run refiner, Hindustan Petroleum Corporation (HPCL), has purchased two million barrels of Russian oil for delivery in May, as the country’s refiners expedite endeavors to get crude from Moscow at a bargain.
The petroleum was provided by European trader Vitol, and it is the second sale of its kind; previously this week, Indian Oil Corporation (IOC) acquired three million barrels of Russian Urals crude for shipping in May at a markdown of $20-$25 per barrel.
Mangalore Refinery and Petrochemicals Ltd (MRPL), another Indian firm, is said to have issued a bid for one million barrels with the same reference point.
Fearing punitive measures from the United States, several nations have reportedly avoided importing Russian oil. As a direct consequence, the country’s oil is now accessible at a lower cost. According to sources, the Indian oil firm does not regard the acquisition of Russian crude to be a concern because neither oil nor Vitol have really been sanctioned.
Because of the Ukraine war, Washington has already been lobbying New Delhi to resist buying Russian oil. On Friday, India dismissed America’s wishes, claiming that its reliance on energy imports must not be “politicized,” and that nations that are oil-independent or still purchase Russian products “cannot credibly advocate restrictive trading,” according to local news media.
India is the world’s third-largest consumer of energy, relying on imports for nearly 80% of its crude oil requirements. Russia accounts for only about 3% of the country’s total crude imports.
OPEC estimated last week that the country’s oil consumption will increase by more than 8% in 2022, owing to stable economic expansion. Increasing energy costs, spurred by recent geopolitical tensions, might put greater strain on India’s current account balance, according to OPEC’s latest monthly oil market report.
An Indian government official told Reuters that New Delhi would “be happy” to purchase Russian oil and other goods at a deep discount, with transactions carried out in the national currencies of India and Russia to avoid the US currency and associated sanctions.
India is “exploring all possibilities” to maintain its energy security, according to a Ministry of External Affairs official. According to local media, the senior official’s statements imply that the Indian government has taken a realistic attitude and would likely proceed with importing Russian oil.