As pressure from western nations mounts on India to shun cheaper Russian oil, New Delhi has staunchly defended its right to scour for “good deals” to satiate its energy appetite. At the same time, it has pointed out Europe’s growing purchases of petroleum products from Moscow despite the Ukraine war.
In a categorical statement suggesting that New Delhi remains steadfast in its commitment to chart its own path, finance minister Nirmala Sitharaman said on Friday: “We have started buying (from Russia). This will continue and India’s overall interest is being kept in mind.” She indicated that India has bought supplies to meet requirement of 3-4 days. New Delhi meets about 85% of its crude oil requirement through imports.
“We explained our position very clearly. I will put my country’s interest first and energy security first. If oil is available and at a discount, why shouldn’t I buy it? I need it for my people. We have already started purchasing. The nitty-gritty is being worked out,” Sitharaman said at a function of the CNBC-TV 18 group.
Separately, external affairs minister S Jaishankar has decried the “campaign” against India on the issue of its oil purchases from Russia.
Speaking in the presence of visiting British foreign secretary Liz Truss at the India-UK Strategic Futures Forum late on Thursday, Jaishankar said: “It is interesting because we have seen for some time what looks almost like a campaign on this issue. I was reading a report today that in March (following Russia’s invasion of Ukraine), Europe has bought, I think, 15% more oil and gas from Russia than it did the month before.”
“If you look at the major buyers of oil and gas from Russia, I think you will find most of them are in Europe,” he added.
According to sources, Russia is offering as much as $30-35 in discounts on its flagship Urals grade to India; the discount will be applied on prices that were prevailing before its invasion of Ukraine on February 23. Since Brent oil prices have since risen from about $97 per barrel to $105, the discounts may go up further. However, Moscow wants New Delhi to buy at least 15 million barrels.
China, meanwhile, has been quietly buying large volumes of oil and gas from Russia, taking advantage of deep discounts offered by Moscow, according to media reports.
The external affairs minister’s comment came on a day when Russian foreign minister Sergey Lavrov arrived in New Delhi on a two-day visit. It also came hours after American deputy national security adviser Daleep Singh said the US didn’t want to see any surge in India’s energy purchases from Russia.
Even Truss’ visit to India came amid growing unease of western countries over India’s reluctance to condemn Russia, its long-time defence partner, for the attack on Ukraine and its decision to buy discounted crude oil from Moscow.
Jaishankar said when oil prices go up, it is natural for countries to look for good deals for their people.
“But I am pretty sure if we wait for two or three months and actually look at who are the big buyers of Russian oil and gas, I suspect the list would not be too different from what it used to be and I suspect we won’t be in the top 10 on that list,” he asserted.
India, Jaishankar stressed, gets the bulk of its oil supplies from West Asia and about 7.5-8% from the US, while the procurement from Russia in the past was lower than even 1%.
In volume terms, India bought about 419,000 tonne of crude oil from Russia in the first 10 months of FY22, accounting for just 0.2% of its total import which was at 175.9 million tonne, petroleum minister Hardeep Singh Puri said last week. India had bought 633,000 tonne from Russia (0.3% of total imports) in FY21 and 2.93 million tonne, or 1.3% of total imports, in the pre-pandemic year of FY20.
Historically, India has been purchasing less amount of oil from Russia, mainly due to high transportation costs. But with hefty discounts now, it makes sense to buy Russian oil.