How India have become a Major Buyer of Russian Oil

Before the outbreak of the Ukraine-Russia war, hardly any crude oil from Russia used to reach the country. However, in the last few days, India has emerged to be the one of the prime importers of Russian oil, despite what her diplomats in the West say. India produces only 15% of its oil requirement from the states of Assam, Gujarat and Mumbai offshore and has to import the rest 85%.

Mineral oil is a necessity for Indians as most of us use fuel for transportation and cooking on a daily basis. India is the world’s largest importer of fuel oil, a tag which India needs to get rid of in the long run. Though India has upped its renewable energy production, fuel oil is still a necessity for most of the common people. India is mostly dependent on Gulf countries like Saudi Arabia, UAE and Iran for its mineral oil requirement.

Mineral oil from Gulf countries have become expensive after Europe started depending on them in the past few months. Heavy economic sanctions put forward by European and American countries towards Russia have made many countries look for alternatives. Europe’s mineral oil requirement was supplied mostly by Russia and Ukraine. The economic sanctions meant that Europe and America now would have to look at the Gulf countries for oil shipment.

As Europe’s dependence on Arab countries’ oil fields increased, the price of oil also increased. However, Russian oil companies offered discount rates of oil, forcing India to divert a part of her revenue towards Russian oil. Despite logistic costs, the increase in crude oil’s prices day by day means that India has to import Russian oil, despite pressure from the West.

As it happened, Indian oil imports from Russia increased by more than 50 times from 0.2% before the start of the Ukraine-Russia war to over 10% now. Last month, Russia overtook Saudi Arabia to become India’s second-biggest supplier of oil behind Iraq as refiners snapped up Russian crude available at a deep discount following the war in Ukraine. Indian refiners bought about 25 million barrels of Russian oil in May.

Russian oil is also expected to take over much of the Indian oil market in the upcoming days as more and more Russian companies come into the picture. The logistics chain was a major hindrance, requiring oil to be shipped a large distance covering land routes through other countries, and Mediterranean Sea and the Red Sea. With the establishment of a well-suited logistics chain now, the import of Russian oil is expected to rise many-fold in the upcoming days.

Written – Himadri Paul

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