India’s oil imports from the United States will increase by 11% this year, according to officials, as the critically energy-short country seeks supplies from producers throughout the world, including Russia, which has been extensively sanctioned.
Following Russia’s invasion of Ukraine last month, oil prices have risen sharply, threatening to drive up inflation, strain state budgets, and stifle GDP just as India was recovering from a pandemic-induced slowdown.
The West has chastised New Delhi for its long-standing political and security connections with Moscow, with some claiming that doing business with Russia will help Russia fund its war. India has called for a stop to the violence in Ukraine, but it did not vote against Russia in the UN Security Council.
During a visit to India on Saturday, Japanese Prime Minister Fumio Kishida met with his Indian counterpart Narendra Modi and stated he would support a united approach to Ukraine.
The majority of India’s oil comes from the Middle East, but the United States has risen to become the fourth-largest supplier, with shipments expected to increase significantly this year, according to a government official briefed on the topic.
Iraq supplies 23 per cent of India’s oil, with Saudi Arabia supplying 18 per cent and the United Arab Emirates supplying 11per cent. According to the official, who spoke on the condition of anonymity due to government policy, the United States’ share of the Indian market will climb to 8 per cent this year.
Russia has been a minor player in the Indian market until its invasion on February 24, when it began supplying discounted oil to mitigate the impact of broad sanctions imposed by the US and other countries.
The country’s main refiner, Indian Oil Corp., has placed a tender for 3 million barrels of Russian oil, while Hindustan Petroleum Corp has reserved 2 million barrels for loading in May.
Another government official defended the choice to buy from Russia by saying that India welcomes competing proposals for oil sales, including those from Moscow, especially when global prices have risen.
According to the second official, European countries continue to import Russian oil and gas, and India cannot be stopped from doing so as well.
According to this person, Western sanctions contain carve-outs to avoid any impact on Russian energy imports, and Russian institutions that process payments for these transactions remain on the SWIFT network.
India’s lawful energy dealings, according to the source, should not be politicised. “Countries that produce their own oil or buy it from Russia cannot legitimately push for trade restrictions.”
(Adapted from EconomicTimes.com)
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