Buying discounted oil from Russia in national interest: FM Sitharaman
India has started procuring discounted crude oil from Russia despite concerns by the US, the Centre has confirmed. "We have started buying oil from Russia. We have received quite a number of barrels. I would think about 3-4 days of supply, and this will continue. India's overall interest is what is kept in mind," Finance Minister Nirmala Sitharaman said on Friday.
Why does this story matter?
The international price of crude oil has reached an all-time high due to the ongoing Russia-Ukraine conflict. Russia has become the most sanctioned country following the invasion of Ukraine, leading to several countries halting their oil purchases from the country. As Russian oil companies now have excess stock of crude oil, they are now offering it at deep discounts to India.
National interest, energy security comes first: Sitharaman
Sitharaman asserted that the Centre had effectively conveyed India's position in a variety of forums. "I would put my country's national interest first, and I would put my energy security first. If there is fuel available and available at a discount, why shouldn't I buy it? I need it for my people, so we have already started purchasing," she said at an event.
US calls the arrangement disappointing
According to United States Commerce Secretary Gina Raimondo, reports that India is establishing a payment mechanism to acquire Russian crude oil are "very disappointing." However, the White House has already clarified that the move by India to obtain cheap crude oil from Russia would not be a breach of US sanctions on Moscow following its invasion of Ukraine.
India's crude oil dependency, demand
India imports over 85% of its crude oil, including approximately 3% from Russia. The country reportedly offered discounts to India on crude oil prices up to $35 a barrel before the conflict started. Based on India's crude oil imports in FY2021, four days of crude oil imports would correspond to around 2.1 million metric tonnes or approximately 16.1 million barrels of crude oil.
India-Russia bilateral talks
India and Russia are presently engaged in bilateral talks, first after Russia's invasion of Ukraine. External Affairs Minister S Jaishankar met his Russian counterpart Sergey Lavrov on Friday, even as the US had warned of "consequences" for circumventing its sanctions against Moscow. The high-level talks also took place at a time when both sides are eager to establish a ruble-rupee trade agreement.
Russia ready to supply whatever India wants: Lavrov
"We are ready to supply whatever India wants to buy from Russia... We are ready to discuss and reach mutually acceptable cooperation," Lavrov said after the meeting. A Bloomberg report said Russia is offering its flagship Urals grade to India at discounts of up to $35/barrel on the pre-war prices. To start with, Russia wants India to take 15 million barrels for this year.
Russia on Ukraine mediation
Talking about the possibility of India acting as a mediator in the Russia-Ukraine crisis, Lavrov stated, "India is an important and serious country." He further said, "If India plays that role that provides resolution, India as our common partner...we are for the security guarantee of Ukraine... The West has ignored its responsibility...India can support such a process."
India has taken neutral stance on Russia-Ukraine crisis
India hasn't openly condemned Russia's invasion of Ukraine and has taken a neutral stance on the matter. While India abstained from voting on resolutions condemning Russia at the United Nations, it also abstained on a resolution on the humanitarian crisis in Ukraine pushed by Russia.
