India is playing an increasingly important role in the global oil market. Buying more and more cheap Russian oil and refining it to fuel Europe and the United States.
Yet New Delhi has faced little public blowback as it pursues the West’s twin goals of reducing Moscow’s energy revenues by curbing oil supply shocks. And as Europe imposes sanctions, India is only set to become more central to a global oil map that has been redrawn by Vladimir Putin’s year-long war in Ukraine.
“US Treasury officials have two main goals: to keep the market well supplied and to deprive Russia of oil revenues.” Said Ben Cahill, a senior fellow at the Center for Strategic and International Studies, a think tank in Washington. “They are aware that Indian and Chinese refiners can earn big margins by buying Russian crude at discounted prices and exporting products at market prices. They are good at it.”
India sent about 89,000 barrels of gasoline and diesel per day to New York last month. The most in four years, according to data intelligence firm Kepler. Daily low sulfur diesel flows in Europe were 172,000 barrels in January, the highest since October 2021.
India’s importance is expected to increase after the European Union’s new ban on Russian petroleum exports comes into force from Sunday.
The ban would remove huge quantities of diesel from the market and see more consumers, particularly in Europe, tap Asia to fill the supply gap.
This will make cheap Russian oil more attractive to India, which depends on imports to meet about 85% of its crude needs. Its refiners, including state-run processors responsible for meeting domestic demand. Increased exports last year to benefit from higher international prices.
Fuel of the West
“India is a net exporter of refined products and much of that will move to the West to help ease the current glut.” Said Warren Patterson, head of commodity strategy at Singapore-based ING Group NV. “It’s pretty clear that a growing portion of the feedstock used for this product comes from Russia.”
According to EU guidelines, India is probably operating within the rules. When Russian crude is processed into fuel in a country outside the bloc, such as India.
The Group of Seven countries are keen to reduce Moscow’s revenue as much as possible. But they are keen to ensure that Russian oil and refined products continue to flow to avoid a global supply crisis. Said Serena Huang, chief Asia analyst at Vortexa Ltd. .
Russian Urals oil trades at steep discount to Brent | India is getting cheaper barrels from OPEC+ producers
A key aspect of the Kremlin’s measures to reduce revenues and keep some oil on the market is the cap on Russian crude prices. A measure that was led by the United States. India has not publicly said whether the nation will abide by the limits, but sanctions have driven oil from OPEC+ producers below the $60 a barrel cap.
Executives and officials from countries and companies including Saudi Arabia.he United Arab Emirates. The United States and Abu Dhabi National Oil Co. are gathering in Bengaluru on Monday for a three-day energy forum organized with India’s Ministry of Petroleum and Natural Gas.