Russia is on its way to becoming India's largest oil supplier, with Moscow actively encroaching on the Asian giant's energy sector, likely to ease the impact of price controls imposed by G7 countries and their Western allies.
According to data provided to The Independent by commodities tracking firm Kpler, Russian crude imports to India in November reached their highest level ever, as refineries bought more than 1.03 million barrels per day.
Narendra Modi's government bought oil at discounted prices from Russia after the outbreak of the war in Ukraine, as Western countries sought to shed their dependence on Moscow for energy supplies.
According to preliminary data, oil exports from Russia rose from zero in January and February of this year to 902,000 bpd by October and hit a record high of just over 1 million bpd in November. “This will likely result in Russia being India’s number 1 supplier in December,” Matt Smith, Kpler's top oil analyst, told The Independent, surpassing its traditional Middle Eastern partners Saudi Arabia and Iraq's current main supplier for the first time.
New Delhi has not committed to the $60 a barrel price cap on Russian oil set by G7 countries, including the European Union and Australia.
This is also because the European Union's own partial embargo on Russian offshore crude, announced in May, went into effect Monday, the same day the G7 imposed the price cap. The EU ban covers more than two-thirds of Russian oil imports to European countries.
India and China have become two of the largest growing economies buying Russian oil. Delhi has repeatedly defended its imports from Russia, saying it has a responsibility to Indian citizens to get the best deal and the West will not "put pressure on it."
Rajiv Jain, additional director general of India's oil ministry, told The Independent that India's ranking in Russia's energy trade is irrelevant to the calculations because Delhi's only interest is in buying the cheapest oil.
“We will buy from wherever we get the cheapest oil. We are not concerned about becoming the number one or number two country [as] our interest lies in buying [wherever] we get the cheapest oil,” Mr Jain said.
He added that the G7 price cap would not affect Indian imports because refiners buy by the best route and what is best available to them. “We don’t negotiate on the route aspect. They buy as per their requirements and they negotiate as per the best rate available,” he said, referring to the entities involved in the trade.
According to analysts, India must now overtake the EU as the largest importer of oil from Russia, with its purchases a major factor in making Western embargo measures ineffective.
“India will be the key contributor to ensuring the price cap is ineffective – they were a sporadic buyer of Russian crude prior to the invasion of Ukraine, but are now importing close to one million barrels per day, a third of Russian seaborne crude exports,” said Mr Smith.
