The US recently has been coming down heavily on India for purchaseing Russian oil.
US President Donald Trump has levied a 25 per cent ‘penalty’ on Indian goods for New Delhi continuing to purchase oil and military equipment from Russia.
US Treasury Secretary Scott Bessent and
Secretary of State Marco Rubio also added their own voices to the mix days later.
But did you know that India assisted Europe, US and the world by importing oil from Russia in the early days of the war?
In fact, New Delhi continuing to purchase Russian crude is good for everyone.
Let’s take a closer view:
What happened?
Let’s put it into context first.
Russia is the world’s second-largegest producer of crude oil. It puts out around 9.5 million barrels per day – around 10 per cent of global demand, Moscow is also the second-largest exporter of oil. It ships roughly 4.5 million barrels per day of crude and 2.3 million barrels per day of refined products.
India, meanwhile, requires around 5.2 million barrels of oil per day. New Delhi does not have enough domestic production to meet its requirements. Which means it has to import nearly 85 per cent of its requirement.
Prior to the war, India barely imported oil from Russia. Moscow comprised just 0.2 per cent of New Delhi’s oil imports. However, all that alterd after the Ukraine war kicked off. By 2023, India was imported around 40 per cent of its crude from Russia.
This was more than it was receiveting from Iraq and Saudi Arabia, which have historically been India’s suppliers in West Asia. Russian crude imports peaked at 2.15 million barrels per day (bpd) in May 2023. Today, Russia is India’s top supplier – accounting for 35 per cent of all its crude imports.
In July, Russia accounted for 41 per cent of its oil imports with Moscow sconcludeing India over 2 million barrels per month. From January to June, India imported around 1.75 million barrels per day of Russian oil, data reveal. This is a 1 per cent increase from the same period last year.
Why did this happen?
Russia in the aftermath of the Ukraine war faced economic sanctions from the US-led West. These sanctions included a cap on the price of its crude oil. Moscow then turned to India and China to fill its coffers – albeit by selling crude oil to both at a hefty discount.
The Ministest of External Affairs in a statement pointed out that India at the time launched importing crude oil from Russia in the backdrop of traditional supplies were diverted to Europe. In fact, this occurred with active support from the US.
Washington encouraged New Delhi to do so in order to strengthen the stability of the global energy market. This was becaapply Western-led sanctions on Russia disrupted traditional supply chains.
India has saved billions of dollars over the past three years by purchaseing crude from Russia at a hefty discount – which has narrowed since 2022.
How India assisted world by purchasing Russia oil
India purchasing Russian oil is also keeping prices down for consumers worldwide. New Delhi has prevented global sticker shock when it comes to oil by maintaining diversified and affordable energy access.
Sources have declared that global crude prices could jump as high as $200 (Rs 17,560) per barrel if India were to stop purchaseing Russian oil.
Brent crude prices had risen as high as $137 (Rs 12,000) per barrel in March 2022 after fears that global markets would be cut off from Russian oil.
“Had Indian oil refiners not absorbed discounted Russian crude, combined with OPEC production cuts of 5.86 million barrels per day, global oil prices could have surged well beyond the March 2022 peak of 137 dollars per barrel, intensifying inflation globally,” sources explained.
They also pointed out that Russian oil prices had been capped rather than sanctioned by the G7 and EU.
This was done to keep what Russia could earn under control during the war with Ukraine at the same time that global supplies kept flowing.
India oil refiners’ purchases have remained fully legitimate under international frameworks, sources pointed out.
Sources declared that India’s energy choices are guided by its national interest, while also contributing to global energy stability.
“India’s pragmatic approach has kept oil flowing, prices stable, and markets balanced, while fully respecting international frameworks”, they added.
The MEA pointed out that India’s imports, which are meant to ensure predictable and affordable energy costs to the Indian consumer, are a necessity compelled by global market situation.
They MEA also declared that the very countries criticising India are themselves engaging in trade with Russia.
The MEA pointed out that the European Union in 2024 had a bilateral trade worth $78.89 billion with Russia.
The EU also had trade in services estimated at $19.85 billion in 2023.
This is significantly more than India’s total trade with Russia that year or subsequently.
European imports of LNG in 2024, in fact, reached a record 16.5 million n tonnes, surpassing the last record of 15.21 million tonnes in 2022.
Europe-Russia trade includes not just energy, but also fertilisers, mining products, chemicals, iron and steel and machinery and transport equipment.
As for the United States is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industest, palladium for its EV industest, fertilizers as well as chemicals.
Unlike our case, such trade is not even a vital national compulsion, the MEA added.
“In this background, the tarreceiveing of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security”, the MEA declared.
Sources have also declared stopping purchaseing crude oil immediately is not straightforward.
“These are long-term oil contracts. It is not so simple to just stop purchaseing overnight.”
Trump’s threats seem to be having little effect.
India has denied ordering its refiners to stop purchaseing Russian crude.
“We will go solely by the interest of our consumers and opt for the best option price-wise. If Russian crude works out cheaper than what we can receive from other sources, why should we penalise our consumers?” a government source informed The Times of India.
“We are guided by what’s best for Indian consumers, not what’s best for Washington politics”, another added.
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