Russia will continue to supply oil to India in an economical, legal and just manner, and the latest US sanctions on Moscow should not be a hindrance, Russia’s first deputy energy minister Pavel Sorokin said on Tuesday on the sidelines of the India Energy Week here.
“We have all the means to do that (supply energy to India) and we will continue that. We have all the means to supply the energy to our clients and fulfil our contract obligations and we will continue doing that in an economical, legal, and justified way,” Sorokin said.
The statement comes after the US imposed a new set of sanctions on Russia in order to stop its funding for the conflict against Ukraine. Russia became the country’s top oil supplier post the outbreak of Russia-Ukraine conflict owing to the healthy discounts Moscow offered on its supplies.
Sorokin said that Russia’s relationship with India is based on economic pragmatism and that energy trade shouldn’t be hindered by any politics. He also noted that it was too early to measure the impact of the latest US sanctions.
“You cannot judge the situation on the basis of a few weeks of data. More time is needed to assess these things, but we believe that constructive relationships will continue to be successful,” he said.
Post the sanctions, Indian refiners were seen seeking alternative supplies of crude oil, diverting its focus towards West Asia, the US, and Africa.
In December, India imported around 620,000 barrels per day of crude oil carried on tankers listed on the latest US sanctions, representing between 13-14% of India’s crude oil imports, according to data provided by Vortexa. While Indian refiners may be forced to seek alternative sources for crude oil supplies, the industry is optimistic of Russia working its way around the latest US sanctions and finding a way to get its oil into the market.
“Sanctions are illegal and have taken a huge toll on the global economy. Sanctions have added an element of uncertainty in a sector like energy, where projects have very long lead times. They have pretty much made international agreements void and have shown that no investments are safe… Tens of billions of dollars have been taken away from developing economies, and they (sanctions) have also increased the cost of capital for everyone in this industry,” Sorokin said.
India’s import of Russian crude oil declined by 13.2% to 1.39 million barrels per day in December against 1.61 million barrels per day in November, data from Vortexa showed. However, Russia remained the largest crude supplier to the country in December accounting for 31% of India’s total crude oil imports.
For the first 12 days of January, India has imported 1.7 million barrels per day of crude from Russia, higher than what the country imported last month.