India defies Trump’s oil penalties, continues Russian imports: Report
&imwidth=600&imheight=450&format=webp&quality=medium "India defies Trump’s oil penalties, continues Russian imports: Report")
Indian Prime Minister Narendra Modi speaks to U.S. President Donald Trump during a meeting at Hyderabad House in New Delhi, India, February 25, 2020. Photograph: (Reuters)
Despite the US' pressure, India continues to source oil from Russian suppliers. As per the report, among other things, this is because Moscow is the world's second-largest crude oil producer and also the second-largest exporter.
Despite US President Donald Trump's newly imposed penalties on top of a 25 per cent tariff for its trade relations with Russia, Indian oil refiners, as per reports, continue to source oil from Russian suppliers, suggest reports. The Indian oil refiners' decision is reportedly based on the price, grade of crude, inventories, logistics, and other economic factors and has nothing to do with the prevailing political atmosphere. Previously, on Friday (Aug 1), speaking on similar lines, MEA spokesperson Randhir Jaiswal, while speaking about media reports that some Indian oil firms had paused Russian imports, said he was not aware of any such developments. He noted that India's broad approach to energy sourcing requirements depends on "what is available in the market and the prevailing global situation."
Why is Russian oil in the headlines, and what does India have to do with it?
On Thursday (Jul 31), Trump signed an executive order imposing new tariffs on dozens of its trade partners. This included a 25 per cent tariff rate and a penalty on India. The tariffs come amid growing criticism from Washington over India's continued imports of discounted Russian oil, despite Western sanctions related to the Ukraine war.
However, as per an ANI report citing sources, despite US' pressure, India continues to source oil from Russian suppliers. As per the report, this is because Moscow is the world's second-largest crude oil producer with an output of around 9.5 mb/d (nearly 10 per cent of global demand). It is also the second-largest exporter, shipping about 4.5 mb/d of crude and 2.3 mb/d of refined products. In March 2022, amid fears of Russian oil getting pushed out of the market, Brent crude prices soared to US $137 per barrel.
"In this challenging environment, India, as the world’s third-largest energy consumer with 85% crude oil import dependence, strategically adapted its sourcing to secure affordable energy while fully adhering to international norms," said the news agency's unnamed sources. They added that Russian oil has never been sanctioned. Instead, the nation was subjected to a G7/EU price cap mechanism that is designed to limit revenue while making sure global supplies flowed uninterrupted. Calling India's purchases legitimate and in line with international norms, they added that "Had India not absorbed discounted Russian crude combined with OPEC+ production cuts of 5.86 mb/d, global oil prices could have surged well beyond the March 2022 peak of US$137/bbl, intensifying inflationary pressures worldwide".
This, they said, means that India's energy decisions, while being guided by the nation's interests, also contributed positively to global energy stability and kept oil flowing, prices stable, and markets balanced, while fully respecting international frameworks.
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