Taking advantage of the western sanctions on Russia following Russia-Ukraine conflict, India started to buy discounted oil from Russia in large quantities. And after refining the crude at home, it began to export to oil-starved Europe.
The Russia-Ukraine conflict has offered India an opportunity to boost purchases of discounted Russian oil. Crude imports from the sanctions-hit country jumped to $31 billion during the twelve months to March, 2023 from just $2.5 billion in the previous year, Indian government data show.
Europe's refined oil imports from India are predicted to exceed 360,000 barrels per day soon, helping to fill the gap left by the ban of Russian oil. This move, however, is benefitting Moscow, since record imports of cheap Russian crude oil have enabled Indian refiners to export diesel and jet fuel to Europe, thereby boosting demand for Moscow's barrels and but resulting in extra freight costs for Europe.
Record imports of cheap Russian crude oil in 2022-23 has enabled Indian refiners to export finished jet fuel and diesel products to Europe, according to reports tracking shipping data collated by Kpler and Vortexa. According to a Reuters report, Europe imported 154,000 barrels of oil per day from Indian refiners before the Russia-Ukraine war. Those imports surged to 200,000 after the European Union banned Russian oil on February 5, as per Kpler data.
The market research firm, Kpler further estimated that India's imports of Russian oil is slated to increase further and is expected to be over two million barrels a day amounting to nearly half of India's overall oil imports. No wonder, for while the rise in discounted oil import from Russia will keep the oil prices stable at home, it will also help India to earn more foreign currency through export of refined oil.
This story is from the July 1 - 31, 2023 edition of BUSINESS ECONOMICS.
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This story is from the July 1 - 31, 2023 edition of BUSINESS ECONOMICS.
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