Regardless of whether the US sanctions are waived, a senior official from India’s Petroleum Ministry stated on Monday that the country will keep buying crude oil from Russia due to economic feasibility and energy security concerns.
Sujata Sharma, joint secretary of India’s petroleum and natural gas ministry, stated that the country’s crude procurement strategy is still driven by market forces like price and supply rather than by political shifts abroad.
Sharma informed reporters that India has been buying oil from Russia before, during, and after the waiver, highlighting that the country’s sourcing decisions are driven by commercial logic.
According to her, India has made sufficient arrangements for long-term crude supplies, so there is currently no shortage.
On May 16, the US sanctions waiver that had been in place to permit the sale and delivery of Russian seaborne crude expired, prompting her to make these remarks. In an effort to stabilise global oil markets and moderate crude prices in the face of geopolitical tensions associated with the Iran conflict, the US Treasury Department implemented the relief measure in March and extended it in April.
According to Sharma, India’s procurement strategy will remain unchanged even after the waiver expires.
As a means of coping with rising energy prices and ensuring a steady supply, India, the world’s third-largest oil importer, has boosted its purchases of cheap Russian crude in recent years.
Despite the fact that Russian entities, including major suppliers like Rosneft and Lukoil, as well as shipping and financial channels, were the targets of US sanctions, Indian refiners started buying more after the temporary relief measures.
Kpler, a market intelligence firm, predicts that even after accounting for shipments covered by the now-expiring waiver, Russia’s crude imports into India will remain near record levels in May, at approximately 1.9 million barrels per day.
As benchmark Brent crude prices have risen above $100 per barrel, putting further pressure on global energy markets, the steady flow of cheap Russian oil comes at the same time.
Experts predict that for the time being, India will continue to import crude oil from Russia, but that the country will likely implement stricter compliance procedures and documentation instead of drastically changing its sourcing patterns.
Image Credit: TOI
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