Russian oil “big customers” after Western sanctions

Data from commodity data firm Kpler showed that India's crude oil imports from Russia stood at 67,000 barrels per day in January 2022, a month before the Russia-Ukraine conflict broke out.

This figure starts to increase to 136,000 barrels/day in March 2022, then jumps to 1.12 million barrels/day in June 2022.

By the time the EU sanctions and G7 price ceiling on Russian crude came into effect on December 5, India was buying 1.2 million barrels of Russian oil per day.

In May, this figure reached an all-time high of 2.15 million barrels per day, up 1,500% compared to March 2022, making India the largest buyer of Russian crude oil.

Circumventing sanctions?

Soon after the conflict broke out in Ukraine, European and Western countries began to reduce their dependence on Moscow’s energy imports in an attempt to squeeze its economy . Germany, for example, suspended the launch of the new Nord Stream natural gas pipeline, while Canada and the United States banned imports of Russian crude oil.

As the conflict dragged on, these countries decided to impose tougher sanctions on Russia to further weaken its finances.

On December 5, 2023, the Group of Seven (G7), comprising Canada, France, Germany, Italy, Japan, the United States, and the United Kingdom, imposed a “price ceiling” on Russian crude oil, prohibiting Western shippers and insurers from trading Russian oil if the price is above $60 per barrel.

World - — Besides India, China has also emerged as a major customer of Russian oil following Western sanctions. Photo: NY Times

Experts believe that imposing a price cap would cripple Moscow’s economy and severely impact Russia’s ability to finance its war with Ukraine. However, Russia has responded by diverting more than 90% of its crude oil exports to India and China.

In March, EU foreign policy chief Josep Borrell said: “If diesel or gasoline that India exports to Europe is produced with Russian oil, that is definitely a sanctions circumvention, and member states must come up with a solution to this.”

However, the Indian government has rejected this idea, saying that the diesel it sells to Europe cannot be considered a “Russian product”.

“At the time of refining, it is mixed with other grades from Saudi Arabia, Iraq and other countries. So either no ban or all diesel from India should be banned, because in a refinery, it is impossible to separate the crude sources,” said Viktor Katona, chief crude oil analyst at Kpler.

Import fever from Europe

With sanctions on Russian oil imports not applicable to India, fuel imports from Moscow have hit a record high, accounting for 45% of the country's total imports.

This makes it easier for India to meet not only its own energy needs but also those of other countries, especially the Western nations that have been facing an energy crisis since the Russia-Ukraine conflict began.

From December 2022 to April 2023, Indian refiners exported an average of about 284,000 barrels of refined petroleum per day (bpd) to Europe, up from about 170,000 bpd in the same period last year, according to data from Vortex.

India has started exporting oil products to some European countries that bought almost nothing from it before the conflict, Anadolu data shows. The country is increasingly importing oil from Moscow and refining it into fuel for Europe and the United States, according to Bloomberg.

The World - — Soon after the Russia-Ukraine conflict broke out in February 2022, European countries began to reduce their dependence on Moscow's energy imports with the aim of crippling its economy. Photo: highnorthnews.com

The Netherlands has emerged as one of India’s largest diesel buyers, with imports rising from 28,000 barrels per day in February 2022 to 49,200 barrels per day in May 2023. In January 2023, the country bought a record 76,000 barrels of diesel per day from India.

France also continuously increased imports from 12,000 barrels/day in December 2022 to 37,000 barrels/day in May 2023.

Germany, which had bought virtually no oil products from India in the three years before the conflict, imported 8,900 bpd in November 2022 and increased to more than 10,000 bpd.

Italy, Romania, Belgium and Spain are among the other European countries that have increased their imports of petroleum products from India in the past six months, since the EU embargo on Russian oil came into effect .

Nguyen Tuyet (According to Anadolu Agency, Indian Express)

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