Amid rows with the European Union and the United States, Russia offers India heavy discounts on the direct sale of oil to India. Following western sanctions and a subsequent lower appetite for its oil, the Federation has started to look to other countries to export the commodity.
In an attempt to lure India, the country is offering discounts of as much as $35 a barrel on prices before the war. India is the second-largest importer of oil in Asia and, in an utter disregard for international sanctions, has been doubling down on Russian crude since the war in Ukraine began.
Currently, Russia is eyeing a 15 million barrel contract for this year. To further entice India to agree to the offer, Russia has also offered India to trade in rupee and ruble denominations.
India's @DrSJaishankar defends buying up discounted Russian oil, saying 'it's natural' for countries to go hunting for 'good deals.'
The Indian FM made the comments alongside UK's @trussliz who is in Delhi, as is Russia's Sergei Lavrov.
— Latika M Bourke (@latikambourke) March 31, 2022
The U.S. official Singh gave Washington’s view on Thursday, saying: “We would not like to see mechanisms that are designed to prop up the rouble or to undermine the dollar-based financial system, or to circumvent our financial sanctions.”
If the two parties reach an agreement, the project would likely be carried out by Russia’s Rosneft PJSC and India’s largest oil processor, Indian Oil Corp.
According to sources privy to the matter, the agreement also contains a clause that states that India would purchase oil from Russia when it is economical. Following the reports, shares of India’s state-run refineries soared. Indian oil went up by 2.3 percent while Hindustan Petroleum climbed 2.4 percent.
Further talks on the offer would be discussed in meetings with Russian Foreign Minister Sergei Lavrov, who arrived in India on Thursday for a day two visit to the country. India is dependent on oil imports to meet 85 percent of its oil needs. Its major trading partners include the U.S, Saudi Arabia, U.A.E, and Iraq.
However, India has bought millions of barrels of crude oil from Russia at a discount since the war erupted, justifying the purchases as beneficial for its citizens and something that even European countries are doing.
India has also contracted to buy sunflower oil from Russia at a record high price after supplies from Ukraine stopped due to the war.
In an attempt to bring down its trade deficit with Russia, India has pushed for exports of medicines, engineering goods, and chemicals to the country. India has also maintained a very neutral stance on Russia’s Ukraine invasion. India has not succumbed to the Western pressures to sanction Russia.
On the contrary, it even tried to bypass the SWFT ban placed on Russia to get access to cheaper oil. New Delhi’s attempts to bypass the sanctions have received criticism from its allies in Quad and the United Kingdom.
Meanwhile, in an attempt to bring down the rising oil prices in the international market, President Biden announced a plan Thursday to draw 1 million barrels of oil per day for the next six months from the U.S. Strategic Petroleum Reserve — an unprecedented push to use the emergency stocks to try to take the edge off of soaring gasoline prices.