After the Russian invasion of Ukraine, India became the second largest buyer of oil, supporting the Russian economy.

Indian oil refiners intend to stop buying Russian oil from ESPO this month. This is happening against the background of the announcement in the country of mobilization, which, according to the estimates of the OPU, will require annually 1.3 trillion rubles from the budget, and the Russian Federation’s plans to double defense spending.

According to Reuters,  India refuses to purchase due to high freight rates.

Sources of the publication note that over the past six months, India, which rarely bought Russian oil before, has become the second largest customer after China. After some companies in the West stopped buying, oil refiners in India bought up almost all grades of Russian oil, taking advantage of discounts. Now the price of Russian oil has risen. 

“On a net basis, after taking into account freight, the cost of ESPO is $5-$7 per barrel more expensive than similar grades from other countries such as Murban in the UAE,” an Indian industry source said.

Refinitiv analyst Ehsan Ul Haq noted that producers in the Middle East reduced official prices for their deliveries in October, which also hit the attractiveness of Russian oil.

Already, Indian companies are increasingly buying other grades of oil from West Africa. Thus, India loaded 2.35 million tons of African oil this month (in August – 1.16 million tons), and Russian oil – about 2 million tons (in August – 3.55 million tons). 

India’s position on the war in Ukraine: what you need to know 

India, like Beijing, avoided criticism of the Russian Federation because of its invasion of Ukraine. The country participates in joint military exercises with Russia and as of the beginning of the summer has a record increase in oil imports from the Russian Federation .

Despite this, the Ukrainian side considered India as one of the possible guarantors of security. In June, the Indian media, citing diplomatic sources, reported that the Ukrainian authorities  asked India to become one of the guarantors of its security, as well as to help with the restoration of the country.

However, when submitting recommendations to the Kiev Security Treaty on September 13, the Office of the President  did not mention India  among the members of the core group of allied countries and potential guarantors. 

Late this month, Indian Prime Minister Narendra Modi  told Russian President Vladimir Putin in a personal meeting that now is not the time for war.  According to US Secretary of State Anthony Blinken, India’s fears about the war in Ukraine, expressed to the Russian dictator, increase pressure on Russia to stop hostilities.

(C)UNIAN 2022