'Do not politicize...' India counters US jibe over Russian oil deal

India has hit back at the United States for questioning New Delhi's move to import around 15 million barrels of crude oil from Russia this year. Government sources said that India's legitimate energy transactions should not be politicized.

Team Newsable

New Delhi, First Published Mar 18, 2022, 1:18 PM IST | Last Updated Mar 18, 2022, 1:18 PM IST

Sources said, "India is highly dependent on imports for meeting its energy requirements. Nearly 85 per cent of our crude oil requirement (5 million barrels a day) has to be imported."

Russia had offered to sell its crude oil cheap and bear the cost of insurance and transportation. Following this, the Indian Oil Corporation signed a deal for 3 million barrels of Russian Urals with trader Vitol for May delivery.

Reacting to the deal, the United States had on Tuesday said that even though India would not be violating American sanctions, it would put the world's largest democracy on the "wrong side of history".

Most of the imports are from West Asia (Iraq 23%, Saudi Arabia 18%, UAE 11%). The United States has also now become an important crude oil source for India (7.3%).

Sources told Asianet News that imports from the United States are expected to increase substantially in the current year, probably by around 11%, taking its market share to 8%.

"Geopolitical developments have posed significant challenges to our energy security. For obvious reasons, we have had to stop sourcing from Iran and Venezuela. Alternative sources have often come at a higher cost," sources said.

"The jump in oil prices after the Ukraine conflict has now added to our challenges. The pressure for competitive sourcing has naturally increased. Russia has been a marginal supplier of crude oil to India (less than 1% of our requirement, not among top 10 sources). There is no G2G arrangement of import," sources added.

Europe has higher dependence on Russian oil and gas. About 75 per cent of Russia's total natural gas exports is to OECD Europe (like Germany, Italy, France). European countries (like the Netherlands, Italy, Poland, Finland, Lithuania, Romania) are also large importers of Russian crude oil.

Notably, recent Western sanctions on Russia have carve-outs to avoid impact on energy imports from Russia. Russian banks that are the main channels for European Union payments for Russian energy imports have not been excluded from SWIFT.

Stating that India has to keep focusing on competitive energy sources, sources said offers are welcome from all producers.

"Indian traders too operate in global energy markets to explore best options. Countries with oil self-sufficiency or those importing themselves from Russia cannot credibly advocate restrictive trading," sources said.

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