India saved approximately $5 billion as a result of significantly increasing its purchases of Russian oil last year. image source: REUTERS
According to the Indian state-controlled lender Bank of Baroda, India’s imports of Russian oil increased tenfold last year.
According to the figures, India, Asia’s third-largest economy, saved about $5 billion by dramatically expanding its crude oil purchases from Russia.
This comes at a time when Western countries are decreasing their energy imports from Russia in response to its invasion of Ukraine.
Russia has been giving discounted prices to countries such as China and India in order to secure energy supply. India, the world’s third-largest oil importer, has seized this chance.
Russian oil accounted for only 2% of India’s yearly crude imports in 2021.
According to the Bank of Baroda, however, that figure has already risen to nearly 20%.
The figures indicate that India’s oil purchases from Russia in the previous fiscal year resulted in savings of approximately $89 per tonne of crude.
Despite facing pressure from the United States and Europe, India has chosen not to comply with Western sanctions on Russian imports.
Moreover, India has refrained from explicitly condemning Russia’s invasion of Ukraine.
India has defended its decision to continue buying oil from Russia, citing its status as a country heavily reliant on energy imports and with a significant population living in poverty.
The country argues that it is not in a position to afford higher prices for energy resources.
In a television interview last year, India’s External Affairs Minister, S. Jaishankar, pointed out that since the beginning of the conflict in Ukraine, Europe had imported six times more energy from Russia compared to India.
According to Mr. Jaishankar, Europe has been able to reduce its Russian imports while guaranteeing a smooth transition.
He questioned Europe’s efforts on principle, asking why they did not curb imports from the start of the conflict.
As the Ukrainian war continues, some analysts expect that Russia will continue to supply inexpensive oil to key Asian energy consumers, including India.
This means that India will continue to profit from cheap Russian oil imports for the foreseeable future.
According to Vandana Hari, an analyst at energy analysis firm Vanda Insights, Russian crude consumption will continue to be concentrated in nations such as India and China, resulting in large discounts.
Hari stated that Indian oil refiners will want to optimize their profit margins for as long as possible, but that if the sanctions are reversed, they will likely return to their old crude oil procurement patterns.