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India’s Russian oil purchase hits record high, displaces China

In 2022, Russia supplied 32 million tons of oil and petroleum products to India…reports Asian Lite News

As more than 90 per cent of Russian oil is flowing into Asia since the beginning of the Ukraine war last year, India’s imports of seaborne crude from Moscow are now even higher than China. China is now in the second spot.

In 2023, Russia will prioritise supplying oil and petroleum products to its “friendly markets” which include India and China.  Moscow has said that it will increase its oil supplies to India this year.

In 2022, Russia supplied 32 million tons of oil and petroleum products to India, Deputy Prime Minister Alexander Novak said in an interview.

“China, India are first of all among the countries where additional volumes of oil and petroleum products will flow. Previously we almost did not supply those products to India, whereas last year exports there totaled 32 mln tons, and they will be even higher this year. Those are our friendly markets,” Russian news agency TASS quoted Novak as saying.

According to S&P Global, Russian oil now accounts for almost 40 per cent of Indian crude imports, which is close to the estimated maximum of 40-45 per cent that refiners could technically process given the quality of the crude.

Several countries have taken advantage of the discounted Russian oil. Recently, Pakistan also started imports of Russian oil.

Few days ago, the chief diplomat of the European Union (EU) said that the bloc should crack down on India reselling Russian oil as refined fuels including diesel into Europe, as western nations move to tighten sanctions on Moscows energy sector.

Josep Borrell, the EU’s high representative for foreign policy, told The Financial Times that Brussels was aware that Indian refiners were buying large volumes of Russian crude oil before processing it into fuels for sale in Europe, saying for the first time the EU should act to stop it.

“If diesel or gasoline is entering Europe?.?.?.?coming from India and being produced with Russian oil, that is certainly a circumvention of sanctions and member states have to take measures,” Borrell said.

The trade is legal under EU sanctions but has been criticised by those who want to see harsher sanctions imposed on Russia and argue that it has allowed Moscow to keep earning large revenues from its oil sales — the biggest component in the Kremlin’s budget.

Borrell acknowledged that the G7 price cap — which aims to limit Russian crude oil sales to other countries to $60 a barrel — had helped cut Russia’s oil revenues, and said it was understandable India wanted to take advantage of cheaper crude.

But the top EU official suggested he was uncomfortable that much of that oil was now flowing back to Europe in the form of refined fuels, The Financial Times reported.

“That India buys Russian oil, it’s normal. And if, thanks to our limitations on the price of oil, India can buy this oil much cheaper, well the less money Russia gets, the better,” Borrell said.

“But if they use that in order to be a centre where Russian oil is being refined and by-products are being sold to us? We have to act.”

(with inputs from India Narrative, IANS)

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