India buys Russian oil. Will it save RF

When the European oil embargo takes full effect, Russia’s budget will lose at least 25 percent.

India has increased its oil purchases from Russia, the U.S. State Department said and urged Indian authorities not to increase imports of Russian hydrocarbons too much. On the eve of Bloomberg reported that India planned to buy twice as much oil from Russia at a discount. The White House admitted that Moscow could earn more from oil than before the full-scale invasion.

The world’s sixth largest economy has taken a neutral stance on Russia’s war against Ukraine, refusing to impose sanctions, hence Moscow’s high hopes for Delhi amid falling expectations associated with China. Athletistic says whether India will help Russia or take advantage of the situation.

India plans to double oil imports from Russia

India has increased its purchases of Russian oil, said senior energy security adviser to the U.S. State Department Amos Hockstein. He raised the topic at the Senate Foreign Relations Committee hearing on June 9.

According to him, India has increased oil purchases from Russia from an average of 100,000 barrels per day to almost 800,000. It should be noted, according to the analytical company Kpler, in April 2022, Russia supplied 284,000 barrels of oil per day to India, in May – 740,000 barrels. In May 2021, this number was 34 thousand.

Washington is continuing its talks with New Delhi on the export of Russia’s energy resources to India, Hockstein said. India’s economy is heavily dependent on Russia’s oil, but, in his opinion, “there is a ceiling to the extent to which they will continue to increase” on these purchases.

“First, don’t overbuy and act in a way you don’t seem to be taking advantage of the suffering of European and American consumers. And second, make an effort to negotiate properly. Because if you don’t buy, then there’s nothing else. So, you have an advantage here, ”the officer’s voice appealed.

He added that Russia is already offering oil discounts of approximately $ 20-30 per barrel to some consumers. He did not specify which countries he was talking about and added: “Russia’s oil discount is getting bigger and bigger.”

Hockstein suggests that Russia could earn more money from the oil and gas trade than before the all-out war against Ukraine because global price increases have offset the impact of sanctions on the West. But there is no certainty here.

The global increase in demand for oil from consumers emerging from the coronavirus pandemic is “greater than expected”.

On June 6, Bloomberg wrote, citing sources, that India plans to double the volume of supplies from Rosneft.

The agency clarified that India is in talks now-the state-owned refineries have expressed a desire to receive more supplies from Rosneft. They expect to receive discounted shipments as international buyers withdraw from deals because of Russia’s war with Ukraine and sanctions.

According to Bloomberg sources, state processors are working together to conclude new six -month contracts that will complement current supplies. Imports are being increased by both state and private Indian factories.

However, on June 9, Reuters reported that Russian officials ’attempt to negotiate with India to sell additional quantities of oil had unexpected difficulties: Rosneft refused to buy batches of Urals from two state-owned refineries in India due to oil shortages.

Three Indian refiners, Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum, entered into negotiations with the company, the largest in terms of production volume in Russia. But the Rosneft deal – for six million barrels with an option for an additional three million – was managed solely by the IOC.

Why will India not help Russia

In the three months that have passed since a comprehensive war against Ukraine began, Russia has lost almost all common trading partners. The volume of imports dropped 89 percent in May.

Developed countries were the first to fall into the cage, supplying complex high-tech goods. Imports from China – one of the major suppliers of high -tech products – have also fallen by more than half.

Against this background, India’s statements about non-participation in sanctions and developing trade relations are very optimistic for Moscow. However, they need to be developed practically from scratch, EurasiaNet wrote.

Singh Rameshwar, president of the Russian-Indian Friendship Society DISH said that, apart from arms, trade between the countries was close to zero.

“In theory, India can close any consumer shortage of Russians. We have hundreds of thousands of companies that make everything from food to cars. But this is in theory. In practice, building within a few months of unprecedented years is very difficult You need to know the laws, have direct contact with entrepreneurs, you need systematic work, which I have not seen, “he said.

Olga Kulikova, Delovaya Rossiya’s business ambassador to India, also does not believe in India’s rapid change: “Most production in India is concentrated in the hands of small companies, they don’t want to make such risky investments – especially since we don’t have a positive background in trade. “

Aleksey Kupriyanov, head of the South Asia and Indian Ocean group at IMEMO RAS, states that the separation makes the Russian Federation a compliance partner, which, against the backdrop of the sharp reduction in cooperation with other countries, is willing play with trump cards, but the penalties still have an impact.

A recent example: Reuters reported in early June that a large company in India, Indian Potash, has not been able to get payment through a bank in Russia since February due to the bank’s disconnection from SWIFT and problems in conversion.

In addition, no one clearly intends to give India over to Russia. For example, the United States, as also a strong diplomat, seems to have chosen not sanctions, but financial action.

In particular, according to Bloomberg, the US is preparing a $ 500 million military aid package for Delhi. Probably not sanctions, but cold calculation will hinder the strengthening of Russia-Indian friendship.

“I have an answer to all the optimistic forecasts:“ Why do they need it? Why would a country where the world’s first economies were willing to be friends risk their trust for the sake of an economy that is relatively weak and now highly dependent? I am especially pleased with the assumptions that India will start sending us gray products from Western businesses located on its territory, ”commented Dmitry Potapenko, an economist, entrepreneur and managing partner of the Management Development Group. .

The expert is convinced that the creators of the West, which broke relations with Russia, will not allow the widespread implementation of any parallel methods.

“The same Mercedes, which has its own plant in India, left Russia not because he was instructed, but because he did not want to deal with us. The word” reputation “is not an empty phrase for him. And even he itself left, having lost a lot of money, will it really allow you to “drain” your products through “gray” channels? It’s the same with other companies, ”he explains.

As for oil, Russian analysts say 15 million tonnes of oil could be shipped to India a year, but this is an exaggeration, said Mikhail Krutikhin, a partner at consulting firm RusEnergy.

“Because in India there is very strong competition for oil from the Persian Gulf, which dominates the country. And despite the huge discount (now almost 40 per cent), it is not possible to send more than six million tonnes a year to India .It also compares to the European cat’s tears market, ”Forbes.ua quotes him.

He added that the Chinese and Indian routes are ready to receive only small additional volumes. “It is not a substitute or even an resemblance of a substitute for the European direction of oil exports,” he said.

Meanwhile, information emerged in the media that trade between India and Iran, which was delayed three years ago due to US sanctions imposed on Iran, could resume soon.

Prior to this, a barter trade mechanism operated between Delhi and Tehran, and the parties hoped to return here. At the same time, much depends on how quickly the issue of the Iranian nuclear program can be resolved.

Krutikhin, like many other experts, predicts that due to the oil embargo, part of Russia’s oil production businesses will be closed, there will be a very sharp reduction in refining.

The overall decline will occur not only within Russia’s mining and processing industry, but also in the hundreds of related businesses that will be forced to close or reduce their activities, he added.

“Overall, the impact for Russia’s budget will be surprising. In the federal budget of the Russian Federation, oil and gas and related companies provide more than 60 percent of all revenues. When the European embargo has become full force, Russia’s budget will lose at least 25 percent, “explains the expert.

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