India’s Imports of Russian Crude Oil Soar Despite US-Imposed Price Cap
Fueled by the imports of crude oil, India’s imports from Russia have jumped about five times (or 384%) to USD 37.31 billion during April-January this fiscal, according to the commerce ministry data. As a result, Russia has become India's fourth largest import partner, up from 18th position in 2021-22. Assistant Secretary of State for Energy Resources Geoffrey R Pyatt, during his February 16-17 visit to New Delhi, said there is “no contradiction at all” in India remaining one of the key global partners of the US and the country's increasing procurement of discounted crude oil from Russia.
Pyatt said the G7 (US, UK, Germany, France, Italy, Japan, Canada) imposed a cap on the oil price that came into effect in December and stopped countries from paying more than USD 60 a barrel to Russia for oil procurement with an aim to stop Moscow profiting from its oil exports. He noted that Putin has lost Russia's traditional largest market for oil and gas in Europe, adding that he has caused untold suffering of innocent civilians and has been responsible for the deaths of tens of thousands of Ukrainians, including women and children.
The ministry data showed that imports from China rose by about 9 per cent to USD 83.76 billion during April-January this fiscal, while imports from the UAE increased by 23.53 per cent to USD 44.3 billion. India’s imports from the US grew by about 25 per cent to USD 42.9 billion during the same period. In January, India's demand for Russian crude oil reached a record high, continuing to be higher than that of traditional Middle Eastern suppliers for the fourth consecutive month. Refineries scrambled to purchase the abundant cargoes at a lower rate than other types of oil.
India has not joined the “price ceiling” imposed by the West on oil from Russia, and Pyatt's comments are the first clear articulation of the Biden administration's position on India's increasing procurement of discounted crude oil from Russia amid the Ukraine conflict. It is pertinent to note that India is reportedly importing Russian oil below the $60 per barrel cap, and the “price cap” regime does not prescribe any direct sanctions for potential violations by third countries such as India.
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1. “India Reaps Pricing Benefits of Crude Oil Imports From Russia” LatestLY, 18 Feb. 2023, https://www.latestly.com/india/news/india-reaps-pricing-benefits-of-crude-oil-imports-from-russia-4858354.html
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