New Delhi has capitalized on a sanctions loophole, according to an energy think tank
India’s exports of oil products to the EU soared 58% in the first three quarters of this year, implying a surge in purchases of fuel made from sanctioned Russian crude, according to the Centre for Research on Energy and Clean Air (CREA).
India’s leading refineries are increasingly reliant on crude from Russia, and the country was the second largest buyer of Russian fossil fuels in October, the energy think tank wrote in a report on Friday. An estimated 77% of India’s imports from Russia, valued at $2 billion, comprised crude oil, CREA noted.
Following the escalation of the Ukraine conflict in 2022, the EU and G7 nations introduced a price cap and an embargo on imports of crude oil and refined petroleum products from Russia in a bid to stem the flow of revenue to Moscow.
However, a lack of EU regulations on petrochemicals produced from Russian crude in third countries has meant that India can import Russian crude, refine it, and legally export oil products to the EU, CREA explained. India has capitalised on the refining loophole, it added.
Following the introduction of sanctions, New Delhi ramped up purchases of Russian oil, sold at steep discounts. The Indian leadership has argued that the country is pursuing a pragmatic energy policy and prioritizing affordability for its citizens.
India is the world’s most populous country and the third-largest oil consumer. At a Russian-Indian business summit in Mumbai on Monday, Indian Foreign Minister Subrahmanyam Jaishankar reiterated that New Delhi wants to build long-term energy cooperation with Russia, which would enable both countries to withstand global uncertainty.
In 2023, bilateral trade amounted to $65 billion, an increase of 80% compared to 2022. Oil imports from Russia currently make up 40% of India’s crude purchases, up from less than 1% before the escalation of the Ukraine crisis in February 2022.
India has come under fire from Kiev and Western countries for its continued cooperation with Russia. Ukrainian leader Vladimir Zelensky said last month that New Delhi should drop what he described as a neutral position on the Ukraine conflict, and support Western sanctions against Moscow.
