India and China are the largest buyers of Russian crude oil. Their import has shoot up after the sanction imposed by the Western countries following the Russia-Ukraine conflict. This shift has raised several questions about how India sources Russian oil, how India navigates the complex geopolitical challenges, how India still maintains its energy security irrespective of the global sanctions.
Sourcing Russian Oil: Maritime Routes and Non-Sanctioned Shipping
Most of the global export takes place through Sea Routes. India also sources Russian crude through marine routes from Russia’s Far Eastern, Black Sea, and Baltic Sea ports. In order to bypass Western sanctions, India is heavily dependent on non-sanctioned vessels and Indian-approved insurance companies.
During Russia-Ukraine war, the prices of Russian oil have been discounted by up to 30-40%. It makes an attractive offer to the Indian refiners. India’s public companies like IOC, BPCL, and private players like Reliance have explored and get benefit out of this heavy discount.
Indian Institutional Channels
The financial entities ensure proper documentation without further involvement of the sanctioned entities. This facilitates the payments and transactions through non-sanctioned channels, therefore, avoiding any related secondary sanctions that could be imposed by the U.S.
Geopolitical Tensions: U.S. Pressure on India.
Despite India’s growing trade of Russian oil, the country also faces pressure from the US. President Donald Trump has threatened India to impose higher tariffs on Indian goods as a penalty for ongoing trade with Russia. The U.S. Treasury has also cautioned that countries defying the price cap on Russian oil could face further penalties.
The Way Forward: Balancing Energy Security and Geopolitics
The demand for crude oil is heavily increasing in India. Moscow, therefore, is playing a critical role in fulfilling this demand. However, the country is trying to navigate its local demand with the growing geopolitical and economic tensions. As the global energy landscape progresses, India faces a subtle balancing act through diplomatic relations and reframing global ties.
Ankur Mishra is a journalist who covers an extensive range of news, from business, stock markets, IPOs to geopolitics, world affairs, international crises, and general news. With over a decade of experience in the business domain, Ankur has been associated with some of the reputed media brands. Through a sharp eye on global marketplaces along with deep insights and analysis of business strategies, Ankur brings simplicity to the complex economic matrix to decode market trends and empower people.
He is committed to entrenched data, facts, research, solutions, and a dedication to value-based journalism. He has covered trade tariff wars, international alliances, corporate policies, government initiatives, regulatory developments, along with micro- and macroeconomic shifts impacting global fiscal dynamics.
