Russian crude oil flows in India are expected to reach 3.36 million metric tons in May, according to Refinitiv estimates. This is almost 9 times higher than the 2021 monthly average of 382,500 metric tons.
In all, the country has received 4.8 million metric tons of Russian oil at a discount since the start of the Ukrainian war, Refinitiv added. Russia’s Urals oil is currently trading at about $ 95 a barrel, while world-renowned Brent crude is above $ 119 a barrel.
Part of the reason for the price disparity is that the West has shunned Russian oil. On Monday, the EU agreed to ban 90% of Russian oil imports by the end of the year. Europe is the largest buyer of Russian energy.
The United States, Canada, the United Kingdom and Australia have already banned imports.
The embargo on a major importer like Europe would increase pressure on the Russian economy, but Moscow has found other buyers in Asia.
India, which imports 80% of its oil, usually buys only between 2% and 3% from Russia. But with rising oil prices this year, the government has steadily increased its Moscow intake, taking advantage of the sharp discounts.
According to Refinitiv, Russia’s crude oil flows to India soared to 1.01 million metric tons in April from 430,000 tons in March.
India’s Ministry of Oil and Natural Gas did not immediately respond to a question about the impact of the EU’s partial ban on the South Asian economy’s oil ties with Moscow.
In early May, India minimized the increase in imports. In a statement, the Ministry of Petroleum and Natural Gas said the country imports oil from around the world, including a significant volume from the United States.
“Despite attempts to put it another way, energy purchases in Russia remain tiny compared to India’s total consumption,” the ministry said in a statement. “India’s legitimate energy transactions cannot be politicized,” he added.
The world’s largest democracy has refrained from taking a hard line against Moscow over the war in Ukraine. Russia and India have a long history of friendly relations, dating back to the Soviet era when the USSR helped India win its 1971 war with Pakistan. India is not the only Asian giant to buy Russian oil. China, historically the only largest buyer of Russian oil, is expected to buy as well. OilX, which uses industry and satellite data to track oil production and flows, found that China’s imports from Russia by pipeline and by sea increased by 175,000. barrels per day in April: an increase of 11% compared to the average volumes in 2021. Maritime imports increase more intensely in May, according to the first data. Demand is expected to pick up as the world’s second-largest economy begins to loosen its strict Covid-related restrictions on major cities.
The EU is moving forward with a partial ban
As purchases of Russian crude in Asia increase, the EU on Monday decided to block most of them later this year.
Russian crude accounted for 27% of the bloc’s imports in 2021, according to Eurostat.
Russian oil delivered by tankers would be banned, while an exemption will be made for the southern segment of the Druzhba gas pipeline, European Commission President Ursula von der Leyen told a news conference.
The northern segment of the pipeline serves Poland and Germany, which have accepted the embargo. The southern part goes to Hungary, Slovakia and the Czech Republic and accounts for 10% of Russian oil imports.
After the embargo, Moscow may seek new customers more aggressively, but it will not be easy.
A significant portion of Russia’s oil exports to Europe travel to the bloc via pipelines. Redirecting these barrels to Asian markets would require expensive new infrastructure that would take years to build.
– Julia Horowitz and Vedika South of CNN contributed to this report