"India plans to continue purchasing Russian oil in defiance of Trump's tariff sanctions, as reported by The New York Times"
India has declared its intention to continue purchasing oil from Russia, disregarding potential financial penalties or tariffs threatened by the United States, including those from former President Donald Trump. This decision is based on contractual obligations, economic considerations, and the intricacies of the global oil market.
The Indian government has not given any directive to oil companies to reduce or halt imports from Russia, emphasising that these are long-term contracts not easily undone overnight. This stance comes as U.S. threats include a 25% tariff on Indian goods and unspecified additional financial penalties if India does not cut back on Russian oil imports.
The shift towards Russian crude has helped India reduce energy import costs and stabilise fuel prices. By 2025, Russian oil is expected to account for 35-40% of India’s crude intake, a dramatic increase from less than 0.2% before Russia’s 2022 invasion of Ukraine. This move has also led to record profits for major refiners like Reliance Industries and Nayara Energy, the latter partly owned by Russian firm Rosneft, although sanctions by the EU on Nayara present complications.
However, it is important to note that India has not publicly confirmed or denied a change in its policy regarding oil purchases from Russia. The White House did not respond to requests for comment regarding the reported halt in India's oil imports from Russia. Similarly, there was no immediate comment from the Indian Ministry of External Affairs, the Ministry of Petroleum and Natural Gas, or the Russian government regarding the potential oil purchases.
The pivot to Russian crude has not been without controversy. In recent weeks, Indian state refiners reportedly stopped buying Russian oil as discounts narrowed in July. The attack on the oil refinery in Ryazan, approximately 180 km southeast of Moscow, caused a fire, and the Annanefteprodukt oil storage facility in the Voronezh region was also hit in the attack. However, the method of the facilities' hits was not specified in the report.
Despite these challenges, India remains Russia's top supplier, accounting for about 35% of Russia's overall oil supplies. The complexities of the global oil market, economic interests, and long-term contractual obligations suggest that India's commitment to Russian oil purchases will persist, at least for the near future.
References: 1. The New York Times 2. Reuters 3. BBC News 4. The Hindu 5. Financial Express
- In light of the financial impacts and potential penalties, the Indian government maintains its stance on financing from the US, prioritizing long-term contracts and economic considerations over oil purchases from Russia.
- Amidst sporting controversies such as the attack on Russian oil facilities, the defi sector's growth in India, with firms like Reliance Industries and Nayara Energy benefiting significantly, continues to shape the country's energy market.
