India playing vital role in global oil industry by converting Russian crude into West’s fuel: Report

According to the report, the US Treasury officials have two main goals: to keep the market well supplied and to prevent Russia from earning oil revenue. They are aware that Indian and Chinese refiners can make more money by buying discounted Russian crude and exporting the refined products at market prices. This is seen as an acceptable arrangement.

India is playing a vital role in the global oil industry as it purchases more and more crude oil from Russia and refines it into fuel for Europe and the United States. This is of great benefit to the West as it enables them to crimp Moscow's energy revenue while also preventing an oil supply shock, Bloomberg reported. 

According to the report, the US Treasury officials have two main goals: to keep the market well supplied and to prevent Russia from earning oil revenue. They are aware that Indian and Chinese refiners can make more money by buying discounted Russian crude and exporting the refined products at market prices. This is seen as an acceptable arrangement.

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“India’s willingness to buy more Russian crude at a steeper discount is a feature, not a bug, in the plan of Western nations to impose economic pain on Putin without imposing it on themselves,” Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University and a former adviser in the Obama administration, was quoted as saying by the Bloomberg.

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India's importance in the global oil market is expected to grow as the European Union enacts new sanctions on Russian petroleum exports. The ban will result in a huge decrease in diesel supplies and result in more consumers, particularly in Europe, seeking to tap into Asia to fill the supply gap. This will make cheap Russian oil even more appealing to India, which is dependent on imports for about 85% of its crude oil needs. India's refiners, including state-run processors, increased exports last year to take advantage of the higher international prices.

India's role in refining Russian crude oil is likely operating within EU guidelines. Refined products from Russia can be delivered to the EU when the crude is processed into fuel in a country outside the bloc, such as India. The Group of Seven nations are determined to reduce Russia's revenue as much as possible, while also ensuring that Russia's oil and refined products continue to flow in order to prevent a global supply crunch.

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A price cap has been put in place by the US to limit the Kremlin's revenue and keep some oil on the market. India has not publicly stated if they follow the price cap, but the sanctions have resulted in oil from the OPEC+ producer being sold below the $60 a barrel cap. The US National Security Council spokesperson has stated that countries, including India, can use the price cap to maintain stability in the energy markets while also limiting Russia's revenue.

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