Russia is eager to increase its oil and petroleum product exports to India, as well as India’s investments in the Russian oil sector, despite western sanctions and a ban on fuel exports to the United States, Russian Deputy Prime Minister Alexander Novak told Petroleum Minister Hardeep Puri on Friday. According to a Russian official statement, Mr. Puri discussed the possibility of strengthening the India-Russia strategic relationship in the energy industry with Mr. Novak, who was also the former Energy Minister.
“Russian oil and petroleum product exports to India have approached $1 billion, and there are clear opportunities to increase this figure,” according to a statement released in Moscow about the phone call, which discussed “current and potential joint projects in the fuel and energy industry, as well as the fact that current projects are being implemented steadily.”
According to the statement, Mr. Novak stated, “We are interested in attracting more Indian investment into the Russian oil and gas sector and developing Russian enterprises’ sales networks in India.” According to reports, the Ministers decided to allow officials to discuss the proposals, including payment options.
The talks appear to support rumors that India has received a reduced crude oil offer from Russia, which has lost key consumers in the last two weeks as a result of sanctions imposed by the United States, the European Union, and other countries in response to Russia’s attacks on Ukraine.
While European countries have exempted Russian banks involved in energy commerce from sanctions because of their strong reliance on Russian oil, the US has issued a blanket embargo on the purchase of all Russian petroleum and petroleum products beginning March 8. The decision caused a dramatic rise in oil prices, which reached $139 per barrel at one point and are still above $100 per barrel, prompting a global inflation concern.
Unsold Stock
Meanwhile, Russia, which has lost around 7,00,000 barrels of oil per day in imports from the United States and may face a fall in European present intakes of 4.5 million barrels per day over time, will be left with unsold stocks if it does not find new clients. By 2020, Russia will have produced around 12% of the world’s oil and 16% of the world’s natural gas.
Finance Minister Nirmala Sitharaman reportedly told the media this week that Russia had made an “open offer” to sell crude oil to India at a reduced price, but that the government’s final decision would be based on a number of factors, including transportation routes, payment channels, and insurance costs for the shipments.
A choice to buy more oil from Russia would have to be balanced against the negative reaction from India’s American and European allies, who seek to economically “isolate” Russia. Last month, External Affairs Minister S. Jaishankar stated that India does not implement “unilateral sanctions,” but in 2019, India agreed to “zero out” all oil imports from Iran in response to US requests.
Western Countries are Unsatisfied with India’s decision
Mr. Puri’s conversation with Mr. Novak is expected to fuel speculation that India could buy more oil from Russia, as well as brave criticism from western governments, who have already expressed displeasure with India’s decision to abstain from at least seven votes on resolutions critical of Russia’s actions at the UN Security Council, General Assembly, Human Rights Council, and International Atomic Energy Agency (IAEA).
The Indian and Russian ministers also discussed the possibility of expanding “mutually beneficial cooperation,” citing India’s interests in the Arctic LNG2 and Sakhalin 1 projects, LNG purchases from Gazprom, and Russian involvement in projects in India such as “the production, processing, and distribution of oil, natural gas, and coking coal,” according to the statement.