Global Hour

Amidst Russia-Ukraine crisis, will India make Russia its partner to import oil?

With a series of sanctions from the western countries and a ban on fuel exports to the United States, Russia is inching towards increasing its oil and petroleum export to India. The country is expecting India to invest in the Russian oil sector. On Friday, Russian Deputy Prime Minister Alexander Novak conveyed the same to the Indian Petroleum Minister Hardeep Puri.

As per the statement issued by the Russian government, Mr. Novak, former Energy Minister, spoke to Mr. Puri about strengthening India-Russia strategic partnership in the energy sector.

“Russia’s oil and petroleum product exports to India have approached USD 1 billion, and there are clear opportunities to increase this figure,” said the statement issued in Moscow. It discussed the current and potential joint projects in the fuel and energy industry, noting that the current projects continue to be steadily implemented.

Mr. Novak said that we are interested in attracting further investments from India to the Russian oil and gas sector and expanding Russian companies’ sales network in India. As per the sources, the Ministers agreed to let the proposal be discussed by officials, including the possible modes of payment.

Since the beginning of the Russia-Ukraine war, the former has lost major buyers as the US and European Union have slammed the country with numerous sanctions. The US has declared a complete ban on the import of all Russian petroleum products from March 8, leading to sharp rise in the oil prices. At one point, the price per barrel reached USD 139.

Russia produced about 12 per cent of the world’s oil and 16 per cent of the world’s natural gas in 2020. Finance Minister Nirmala Sitharaman, in a statement said that Russia has made an open offer to sell its crude oil to India at a discounted price, the government will make its final decision after considering all factors like transport routes, insurance costs for shipments, payment channels etc.

India’s decision will also impact its relation with the US and European Union, which are categorically trying to isolate Russia on all economic fronts. Last month, External Affairs Minister, S. Jaishankar said that India doesn’t follow unilateral sanctions. The conversation between the two officials is expected to escalate speculation that India is deciding to make Russia its partner for the import of oil.

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