How much India has saved by buying Russian oil since the start of the war

As unbelievable as it may seem, a year has passed since the war in Ukraine began. An event that very few predicted and turned the lives of millions of people upside down, as well as the economies of the entire world, first and foremost the Russian economy. For this country, Vladimir Putin’s actions have resulted in painful economic sanctions that have cut into its main source of income: the sale of its fossil fuels and derivatives. However, Russia’s financial blow turned out to be an opportunity for India. Also, within a year, the Asian country would have saved around 30,000 million rupees (nearly 343 million euros) on Russian crude oil imports, said BJP vice-president Shivkumar Udasi.

India is highly dependent on imports of fossil fuels: 85% of its energy needs are met by products from Saudi Arabia, Iraq and Russia. Before the invasion of Ukraine in February 2022, Russian oil accounted for only 1% of India’s purchases. Four months and several Western sanctions later, that percentage was already 18%, making Russia the second largest supplier of crude oil to the Asian nation. Since then, the imposition of new ceilings has further depressed Russian crude prices, prompting the nation’s purchases to reach a record 1.4 million barrels per day in January, up 9.2% from December, according to Reuters. . To date, Russia is its main supplier.

According to Quartz, India saved Rs. More than 30 billion. And Indian refineries are believed to be buying fossil fuels from Russia Below the $60 cap Imposed by Western countries, but suppliers do not want to declare free prices of goods coming to the Asian country, Reuters reports.

The lower cost of fossil fuels from Russia has not only saved India a lot of money, They have to be refined and exported to Europe and America at higher prices. In January, the country shipped 172,000 barrels per day of low-sulphur diesel to the Old Continent, something that hasn’t happened in more than a year. In the same month, another 89,000 barrels of gasoline and diesel arrived in New York each day, the most in nearly four years, according to data intelligence firm Kpler. All this was before the ban on imports of Russian oil and derivatives came into effect.

Problems paying for Russian crude oil

Sanctions on Russian oil and refined products imposed by the West are aimed at reducing Moscow’s revenues. At the same time, it is in its interest to maintain the flow of fossil fuels from Russia to avoid supply shortages. Since India serves both purposes, The international community did not criticize his strategy The country has a very relevant role in the new world map of crude oil.

However, it does not facilitate its development. Although the Asian country does not recognize Western economic sanctions against Moscow, banks and other financial institutions do not want to risk inadvertently violating these measures, therefore, Making it harder to pay for Russia’s oil imports by Indian refineries.

One of the companies affected by this situation is state-owned Hindustan Petroleum, which has increased its imports of Russian crude oil by 5 percentage points to represent about 30% of its position from the 2021/2022 financial year. Alternative banking channels should be sought. According to a Reuters source, Other refiners have chosen to pay to buy Russian oil in dirhams.