While the Russian-Ukrainian battlefield is under fire, Modi has been able to take advantage of both sides. He doesn’t want to talk about the sanctions against Russia. No sanctions, and India has voted neutrally or abstained in several Security Council votes on motions related to the situation in Russia and Ukraine.
Meanwhile, India imports a large amount of Russian crude oil, and after refining it into finished petroleum products such as gasoline and diesel, it is then successfully sold to the United States and Europe, where fuel supplies are tight. This is because mixing Russian crude oil with other oils is not considered importing Russian crude oil for companies in subdivided countries as long as the Russian oil content does not exceed 50%.
How big is this business?
In a normal year, India’s oil comes mainly from Middle Eastern countries such as Saudi Arabia, and less than 1 million barrels per month, or 0.2%, from Russia.
Now, Russia has overtaken Saudi Arabia as India’s second largest oil supplier, after Iraq.
After the outbreak of the Russo-Ukrainian War, India’s imports from Russia immediately reached about 800,000 barrels per day, a day’s volume almost catching up with the past month’s volume, which is now 25 times more than the pre-war volume in a month.
What’s more, India also took the opportunity to hoard a lot of Russian oil. Russia has already supplied India with more than 24 million barrels of oil in May, up from 7.2 million barrels in April and 3 million barrels in March, while the scheduled supply for June now stands at 28 million barrels.
With such a large import volume, India certainly does not have the capacity to use all of it for reserves, but instead has been working at full steam to refine imported Russian oil into Indian-made gasoline and diesel, which it then sells to the U.S. and European countries.
Since March, India’s ship traffic to Europe has increased by 1/3 and to the United States by 43%.
In the months of the Russia-Ukraine conflict, total EU energy imports from Russia fell by just over $100 million, and the rejected crude oil went round and round, changing a shipping route to eventually make its way to the U.S. market.
The oil ban by the West has had a major impact on Russian oil. As an important source of income and war expenditure for Russia, Putin urgently needs a suitable “springboard” to bypass the Western sanctions and sell energy to the West in name only.
Modi is very good at taking advantage of Russia’s current situation, fierce bargaining with Russia, not only to buy more and more oil, but also to buy more and more cheap.
According to the media, the price is very attractive, has been cut to 70 U.S. dollars a barrel, each barrel can be lower than the international oil price of about 35 U.S. dollars, that is, the international oil price discounted a 60%. It is said that India’s next step may be to work toward a 50% discount.
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