Russia now the biggest Oil Supplier to India
Official data revealed that Russia remained the biggest supplier of crude oil to India in terms of value in February, even though there was a cap on western prices at $60 per barrel. In February, India imported crude oil worth $3.35 billion from Russia, with Saudi Arabia coming second at $2.30 billion and Iraq at $2.03 billion.
Russia now the biggest Oil Supplier to India: Key Points
- During the period from April to February, India’s imports of Russian oil surged to $27 billion, placing Russia as the second-largest crude oil exporter to India in FY23, following imports from Iraq which totaled $30 billion.
- Other significant exporters included Saudi Arabia at $26.8 billion, followed by the UAE at $15.6 billion, the US at $10.05 billion, and Kuwait at $7.59 billion.
- In February, Russia continued to be the leading oil exporter, with India importing crude oil worth $3.35 billion from Russia, $2.30 billion from Saudi Arabia, and $2.03 billion from Iraq, indicating that there was little change in the import trends despite the price cap imposed in December.
India’s Oil Needs fulfilled by Imports: Deepto Roy
- Deepto Roy, a Partner at Shardul Amarchand Mangaldas & Co, has stated that since 80% of India’s oil needs come from imports, and a large part of that is being supplied by Russia, it is strategically important for India to continue purchasing Russian crude even if it exceeds the price cap.
- However, whether Indian companies should buy above the price cap would depend on various factors, such as the availability of alternative sources.
- Additionally, Indian entities purchasing Indian crude are not recognized or subject to sanctions under Indian law.
According to Roy, companies could face sanctions from international banks, shareholders, or directors. The sanctions system is intricate and extensive, so Indian companies should seek legal guidance on how sanctions could affect them and what steps they should take.
G7’s attempt to limit Russia Oil Revenue
- BP’s top economist, Spencer Dale, recently commented that the price cap imposed by the G7 countries aimed to limit Russia’s oil revenue while ensuring a sufficient oil supply.
- He observed that the price cap has been more successful than expected in achieving this goal.
- During the fiscal year 2023, Russia became a significant oil supplier to India for the first time, providing oil at discounted rates amidst the conflict in Ukraine.
- Despite concerns expressed by the West regarding India’s imports from Russia during the conflict, India has remained firm, stating that it will explore all options to secure its energy needs.
Finance Minister Nirmala Sitharaman recently stated that India could continue purchasing Russian oil even if the price exceeded the cap.