How India helped Europe, US and the world by importing oil from Russia

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2 days ago

The US is not happy about India buying Russian crude oil. President Donald Trump has levied a 25 per cent tariff on Indian goods for New Delhi continuing to purchase oil. But here's why India buying Russian crude bailed everyone out in 2022 and continues to do so read more
US has imposed sanctions on India for buying Russian oil
The US recently has been coming down heavily on India for buying Russian oil.
US President Donald Trump has levied a 25 per cent 'penalty' on Indian goods for New Delhi continuing to purchase oil and military equipment from Russia.
US Treasury Secretary Scott Bessent and Secretary of State Marco Rubio also added their own voices to the mix days later.
But did you know that India helped Europe, US and the world by importing oil from Russia in the early days of the war?
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In fact, New Delhi continuing to buy Russian crude is good for everyone.
Let's take a closer look:
What happened?
Let's put it into context first.
Russia is the world's second-biggest producer of crude oil. It puts out around 9.5 million barrels per day – around 10 per cent of global demand, Moscow is also the second-largest exporter of oil. It ships roughly 4.5 million barrels per day of crude and 2.3 million barrels per day of refined products.
India, meanwhile, requires around 5.2 million barrels of oil per day. New Delhi does not have enough domestic production to meet its requirements. Which means it has to import nearly 85 per cent of its requirement.
Prior to the war, India barely imported oil from Russia. Moscow comprised just 0.2 per cent of New Delhi's oil imports. However, all that changed after the Ukraine war kicked off. By 2023, India was imported around 40 per cent of its crude from Russia.
This was more than it was getting from Iraq and Saudi Arabia, which have historically been India's suppliers in West Asia. Russian crude imports peaked at 2.15 million barrels per day (bpd) in May 2023. Today, Russia is India's top supplier – accounting for 35 per cent of all its crude imports.
In July, Russia accounted for 41 per cent of its oil imports with Moscow sending India over 2 million barrels per month. From January to June, India imported around 1.75 million barrels per day of Russian oil, data show. This is a 1 per cent increase from the same period last year.
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Why did this happen?
Russia in the aftermath of the Ukraine war faced economic sanctions from the US-led West. These sanctions included a cap on the price of its crude oil. Moscow then turned to India and China to fill its coffers – albeit by selling crude oil to both at a hefty discount.
The Ministry of External Affairs in a statement pointed out that India at the time began importing crude oil from Russia in the backdrop of traditional supplies were diverted to Europe. In fact, this occurred with active support from the US.
Washington encouraged New Delhi to do so in order to strengthen the stability of the global energy market. This was because Western-led sanctions on Russia disrupted traditional supply chains.
US President Donald Trump. Reuters
India has saved billions of dollars over the past three years by buying crude from Russia at a hefty discount – which has narrowed since 2022.
How India helped world by purchasing Russia oil
India purchasing Russian oil is also keeping prices down for consumers worldwide. New Delhi has prevented global sticker shock when it comes to oil by maintaining diversified and affordable energy access.
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Sources have said that global crude prices could jump as high as $200 (Rs 17,560) per barrel if India were to stop buying Russian oil.
Brent crude prices had risen as high as $137 (Rs 12,000) per barrel in March 2022 after fears that global markets would be cut off from Russian oil.
'Had Indian oil refiners not absorbed discounted Russian crude, combined with OPEC production cuts of 5.86 million barrels per day, global oil prices could have surged well beyond the March 2022 peak of 137 dollars per barrel, intensifying inflation globally,' sources explained.
They also pointed out that Russian oil prices had been capped rather than sanctioned by the G7 and EU.
This was done to keep what Russia could earn under control during the war with Ukraine at the same time that global supplies kept flowing.
A Russian crude oil tanker transits the Bosphorus in Istanbul. Trump has threatened to raise tariffs on India over its purchase of Russian oil. File image/Reuters
India oil refiners' purchases have remained fully legitimate under international frameworks, sources pointed out.
Sources said that India's energy choices are guided by its national interest, while also contributing to global energy stability.
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'India's pragmatic approach has kept oil flowing, prices stable, and markets balanced, while fully respecting international frameworks', they added.
The MEA pointed out that India's imports, which are meant to ensure predictable and affordable energy costs to the Indian consumer, are a necessity compelled by global market situation.
They MEA also said that the very countries criticising India are themselves engaging in trade with Russia.
The MEA pointed out that the European Union in 2024 had a bilateral trade worth $78.89 billion with Russia.
The EU also had trade in services estimated at $19.85 billion in 2023.
This is significantly more than India's total trade with Russia that year or subsequently.
European imports of LNG in 2024, in fact, reached a record 16.5 million n tonnes, surpassing the last record of 15.21 million tonnes in 2022.
Europe-Russia trade includes not just energy, but also fertilisers, mining products, chemicals, iron and steel and machinery and transport equipment.
As for the United States is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilizers as well as chemicals.
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Unlike our case, such trade is not even a vital national compulsion, the MEA added.
'In this background, the targeting of India is unjustified and unreasonable. Like any major economy, India will take all necessary measures to safeguard its national interests and economic security', the MEA said.
Sources have also said stopping buying crude oil immediately is not easy.
'These are long-term oil contracts. It is not so simple to just stop buying overnight.'
Trump's threats seem to be having little effect.
India has denied ordering its refiners to stop buying Russian crude.
'We will go solely by the interest of our consumers and opt for the best option price-wise. If Russian crude works out cheaper than what we can get from other sources, why should we penalise our consumers?' a government source told The Times of India.
'We are guided by what's best for Indian consumers, not what's best for Washington politics', another added.