India is sticking to its oil purchases from Russia, despite pressure from the U.S. to reconsider. AS Sahney, the Chairman of Indian Oil Corporation (IOC), which is the largest oil company in India, explained that the country bases its oil purchases purely on economic factors.
While the prices of Russian crude, like Urals, have fluctuated, any decision made has been driven by discounts. Not too long ago, discounts were around USD 40 per barrel but have currently dropped to about USD 2.70. This pricing influences how much crude India buys each month.
In 2022, India became the largest buyer of Russian oil as Western nations withdrew due to sanctions following Russia’s invasion of Ukraine. Sahney stated that IOC’s imports are motivated by practical pricing, and there are no outside pressures to change their buying patterns. He confirmed that Russian oil has continued to flow into Indian refineries without interruptions.
During the last quarter, Russian oil constituted 22-23% of IOC’s processed crude. This figure rises to around 34% for Bharat Petroleum Corporation Ltd (BPCL). The director of BPCL indicated that even though the discounts tightened recently, they aim to maintain a steady share of Russian crude as long as no sanctions are imposed.
Historically, before February 2022, Russian crude accounted for less than 1% of India’s total imports. However, as Western nations turned away from Russian oil, India stepped in to grab discounted fuel. Today’s scenario is telling; Russian oil now meets about 30% of India’s energy needs.
Sahney maintains that their ongoing purchases do not violate any sanctions, noting, “We have not received any directive to change our buying habits.” Even with rising tensions such as the recent announcement of a 25% tariff on U.S. imports from India due to these purchases, India’s actions seem centered on economic rationale rather than geopolitical pressures.
In response to this complex situation, public sentiment varies. Some applauded India’s independence in decision-making, while others express concern regarding potential repercussions from the U.S.
As global energy markets adjust and nations strategize their oil imports, India’s stand offers a unique case study of balancing economic interests with international relations. With ongoing developments, the landscape of oil trading continuously evolves, affording India the chance to refine its energy strategies while navigating through challenging global waters.
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