New Delhi has been boosting energy purchases from Moscow despite Western pressure to shun sanctioned crude
Indian officials believe that global crude oil prices would have skyrocketed if they had not ramped up imports from Russia in the wake of Western sanctions, local media reported on Monday, citing the country’s Petroleum and Natural Gas Ministry.
India boasts Asia’s third-largest economy and is the world’s third-largest oil importer and consumer. It has become a major buyer of Russian crude, with deliveries hitting a four-month high in November, amounting to 1.7 million barrels per day (bpd), according to ship-tracking data.
The Petroleum Ministry’s statement was made in a report submitted to the parliament in New Delhi on December 20, the Indian Express said on Monday.
“If they (Indian refiners) had not imported Russian oil into India, which may be a big number of 1.95 million barrels per day, that deficiency would have created a havoc in the crude oil market and the prices would have shot up by about $30-40 [per barrel],” a ministry representative was quoted as saying in the report.
“The crude oil market is such that in the market of 100 million barrels per day, if the OPEC (Organization of the Petroleum Exporting Countries) says that they are going to reduce it by one or two million barrels per day, prices increase by 10% to 20% and reach up to $125-130,” the official added.
Global oil prices breached the $100-per-barrel threshold in 2022 following Western sanctions imposed on Russia due to the Ukraine conflict. Prices later retreated with benchmark Brent trading on average at around $80 per barrel this year.
The spokesman indicated that Indian crude oil buyers have faced challenges due to the sanctions on Moscow, including in payments and logistics. “Hence, Indian buyers… arrange import of Russian origin crude oil grades from the counterparties on delivery basis, where the seller takes responsibility in delivering crude oil (with suitable Insurance coverage) at discharge ports in India,” he said.
New Delhi has ramped up purchases of discounted Russian oil after Moscow rerouted supplies to the East. This year, India replaced the EU as the largest buyer of seaborne Russian crude.
December 25, 2023 at 07:30PM