India to Continue Buying Oil from Russia Despite US Sanctions Threat

Strategic Insights -

Indian oil refineries will continue to buy oil from Russia, officials have said, despite threatened US sanctions against Moscow's trading partners over the war in Ukraine. This decision comes despite media reports suggesting India would stop buying cheap Russian oil, and a statement by Trump saying such a move would be "a good step." However, official sources in India have rebutted Trump's claim, stating that supply decisions are based on "price, grade of crude, inventories, logistics, and other economic factors." The Indian government has maintained that its policy on importing Russian oil has not changed, with officials citing long-term oil contracts as the reason for continued purchases.

Key Takeaways:

  • Indian oil refineries will continue to buy oil from Russia despite threatened US sanctions.
  • Official sources in India have stated that supply decisions are based on price, grade of crude, inventories, logistics, and other economic factors.
  • The Indian government has maintained that its policy on importing Russian oil has not changed, with officials citing long-term oil contracts.
  • Trump said that India stopping buying oil from Russia would be "a good step," but Indian officials have rebutted his claim.
  • Russia is the top oil supplier to India, responsible for about 35% of the country's supplies.
  • India says it must find the cheapest supplies to protect its population against rising costs.
  • The US has imposed tariffs of 25% on all Indian goods and imposed penalties for buying arms and energy from Russia amid the war in Ukraine.
  • Trump has given an 8 August deadline for Vladimir Putin to stop the war or risk further sanctions on tariffs on countries that import Russian oil.
  • Indian state-owned refineries had suspended Russian oil purchases amid the tariff threats and narrowing price discounts, but this has since changed.

Statistics:

  • Russia is the top oil supplier to India, responsible for about 35% of the country's supplies (Source: Reuters).
  • India says it needs to find the cheapest supplies to protect its population against rising costs (Source: India's foreign ministry spokesperson, Randhir Jaiswal).
  • The US has imposed tariffs of 25% on all Indian goods (Source: White House).
  • The sanctions deadline given by Trump is 8 August (Source: Trump's statement).
  • Indian refineries had suspended Russian oil purchases amid the tariff threats and narrowing price discounts, but this has since changed (Source: Reuters).
  • Global oil prices surged to $137/bbl in March 2022 (Source: Reuters).

Sources:

  • Reuters: "Indian state-owned refineries suspend Russian oil purchases amid tariffs, discount hopes"
  • ANI: "Indian oil refineries to continue buying oil from Russia despite US sanctions threat"
  • White House: "Tariffs on Indian goods"
  • Trump's statement on Truth Social: "India's friend, but buys most military equipment from Russia"
  • India's foreign ministry spokesperson, Randhir Jaiswal: "We look at what is available in the markets, what is on offer, and also what is the prevailing global situation or circumstances"