India and Russian oil: why New Delhi’s strategy may determine prices in winter
22 September 19:57
Indian oil refiners do not plan to give up Russian oil, even despite the resumption of trade negotiations with the United States.Bloomberg writes about this, citing industry sources, "Komersant Ukrainian" reports.
Purchases will remain active in November and December. Reliance Industries, which has a long-term contract with Rosneft, remains the most important player.
The American factor
In August, U.S. President Donald Trump raised tariffs on Indian goods to 50%, accusing New Delhi of financing Russia’s war against Ukraine. This sharply reduced Russian oil imports to 1 million barrels per day, the lowest level in two years.
However, after speaking with Prime Minister Narendra Modi, Trump changed his tone, thanking him for his “support in ending the war.” The pressure eased, and Indian refineries are preparing to increase purchases again.
Role in the market
India, along with China, remains the main buyer of Russian oil. For Moscow, these markets have become critical after European sanctions.
The EU and the G7 have lowered the price ceiling for Russian crude to $47.6 per barrel, but New Delhi considers these restrictions unrealistic.
Economic outlook
- World oil prices: if India resumes purchases at the level of 1.5-1.7 million barrels per day, this will reduce the supply shortage in winter and may curb the growth of prices on world markets.
- For Russia: active purchases by India will allow the Kremlin to retain a significant portion of oil revenues, even despite the discounted price.
- For the US: Washington’s pressure may lose effectiveness if Trump does not offer India economic alternatives.
- For the EU: cheaper Russian exports to Asia may push other countries to circumvent sanctions, weakening the effect of restrictions.
As a reminder, after Russia’s invasion of Ukraine in 2022, Western countries imposed sanctions on Russian energy resources. Europe has reduced imports from Russia to almost zero, forcing Moscow to reorient its supplies to Asia.
As a result, India has become one of the largest buyers of Russian oil, in part due to significant discounts.
