Latest news with #pre-Ukraine
The Star
11-08-2025
- Business
- The Star
Reliance likely to switch back to Middle East oil
NEW DELHI: Reliance Industries is likely to shift back to its traditional Middle Eastern sources for oil if India yields to pressure from US president Donald Trump to cut Russian imports, trade sources say. India became the biggest buyer of seaborne Russian crude in the aftermath of Moscow's 2022 invasion of Ukraine and is under heavy pressure from Washington to cut its energy ties with Russia. India's biggest buyer, Reliance, operates the world's largest refining complex at Jamnagar in Gujarat where it can process about 1.4 million barrels per day (bpd). 'If Reliance stops buying Russian crude, it will most likely turn to Middle Eastern suppliers due to geographic proximity. The good news is that the Organization of the Petroleum Exporting Countries or Opec is increasing crude output as part of its plan to unwind voluntary cuts,' said Anh Pham, a senior analyst at LSEG. 'Any hit to Russian supplies will increase their participation (in the spot market) and that would tighten spot market and raise prices. They are a giant player,' said Tushar Tarun Bansal, senior director at oil consultancy Alvarez and Marsal. 'They have to take more of Middle Eastern grades, mainly from Saudi Arabia and the United Arab Emirates. Also, they would look at buying more from Latin America such as Brazil. At times (in the past) they also bought some of the North Sea stream, they could also go back to them,' Bansal said. Reliance did not immediately respond to a Reuters' request for comments. 'Reliance has the flexibility and trading know-how to revert to pre-Ukraine war procurement, so it may agree to change sourcing,' said Harry Tchilinguirian, group head of research at Onyx Capital Group. Indian state refiners paused Russian purchases in late July, Reuters reported, though Reliance continues to buy under a 500,000 bpd deal signed with Russia's Rosneft last year. The port of Sikka in western India, which handles Reliance imports, is scheduled to receive 22 cargoes from Russia this month, LSEG data showed. The state refiners were responding to threatened tariffs from Trump. Last Wednesday the United States imposed an additional 25% tariff on imports from India, citing its continued purchases of Russian oil. That was to take effect in 21 days and would raise duties on some Indian imports to as high as 50%. It has defended its purchases from Russia, which accounted for 35% of its supply in the first half of 2025, on economic grounds, and criticised the United States and the European Union for singling out New Delhi. Reliance is controlled by billionaire Mukesh Ambani. — Reuters
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Business Standard
08-08-2025
- Business
- Business Standard
Reliance likely to switch back to West Asia oil if Russian supply dries up
Reliance Industries is likely to shift back to its traditional Middle Eastern sources for oil if India yields to pressure from US President Donald Trump to cut Russian imports, trade sources said. India became the biggest buyer of seaborne Russian crude in the aftermath of Moscow's 2022 invasion of Ukraine and is under heavy pressure from Washington to cut its energy ties with Russia. India's biggest buyer, Reliance, operates the world's largest refining complex at Jamnagar in Gujarat where it can process about 1.4 million barrels per day (bpd). "If Reliance stops buying Russian crude, they will most likely turn to Middle Eastern suppliers due to geographic proximity. The good news is that OPEC is increasing crude output as part of its plan to unwind voluntary cuts," said Anh Pham, a senior analyst at LSEG. "Any hit to Russian supplies will increase their participation (in the spot market) and that would tighten spot market and raise prices. They are a giant player," said Tushar Tarun Bansal, senior director at oil consultancy Alvarez and Marsal. "They have to take more of Middle Eastern grades, mainly from Saudi Arabia and UAE. Also, they would look at buying more from Latin America such as Brazil. At times (in the past) they also bought some of the North Sea stream, they could also go back to them," Bansal said. Reliance did not immediately respond to a Reuters' request for comments. "Reliance has the flexibility and trading know-how to revert to pre-Ukraine war procurement, so they may agree to change sourcing," said Harry Tchilinguirian, group head of research at Onyx Capital Group. Indian state refiners paused Russian purchases in late July, Reuters reported, though Reliance continues to buy under a 500,000 bpd deal signed with Russia's Rosneft last year. The port of Sikka in western India, which handles Reliance imports, is scheduled to receive 22 cargoes from Russia this month, LSEG data shows. The state refiners were responding to threatened tariffs from Trump. On Wednesday the United States imposed an additional 25 per cent tariff on imports from India, citing its continued purchases of Russian oil. That was to take effect in 21 days and would raise duties on some Indian imports to as high as 50per cent. It has defended its purchases from Russia, which accounted for 35per cent of its supply in the first half of 2025, on economic grounds, and criticised the US and the European Union for singling out New Delhi. Reliance, which is controlled by billionaire Mukesh Ambani, said in its annual report on Thursday that political and tariff-related uncertainties could hurt trade flows and the demand-supply balance.
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Business Standard
08-08-2025
- Business
- Business Standard
Trump's tariffs to India's oil bets: Decoding sanctions on Russia
Facing sanctions from multiple countries since the Ukraine conflict in 2022, including the United States (US) and the European Union (EU), Russia has become one of the most heavily sanctioned nations globally. Over the years, the EU has announced 18 sanction packages against Russia. Sanctions on Moscow are now trickling down to India, with refiners like Nayara Energy struggling to keep operations running and Indian traders staring at a 50 per cent US tariff. Here's a look at the various sanctions and trade bans imposed on Moscow over the years and how they translate for the country's economy. The pre-Ukraine picture Even before the Russia-Ukraine conflict began in February 2022, starting one of the largest and deadliest wars in Europe since World War II, Moscow was still under sanctions. In March 2014, Russia annexed the Autonomous Republic of Crimea and the city of Sevastopol. This was seen as a violation of the territorial integrity of Ukraine. Shortly after this, the US and EU imposed multiple sanctions against Russian banks and energy firms. According to the European Union External Action, here are some of the bans that were placed on Russia: Fresh sanctions under Trump's first presidency While it seemed like Russian President Putin and the newly appointed American President Donald Trump would get along well, Trump gave a green light to multiple sanction packages against Russia despite maintaining a friendly stance in public. During Trump's first tenure as the US president (2017-2021), here are some of the bans imposed on Russia: According to the US State government data, Washington imposed sanctions against eight Russian companies in connection with the Iran, North Korea, Syria Nonproliferation Act in March 2017. In April 2017, CNN reported that the Trump administration denied a request from ExxonMobil to allow it to resume oil drilling in Russia. Trump imposed fresh sanctions in 2018 on 13 Russian government hackers and front organisations that had been indicted by Mueller's investigation, according to Business Insider. Sanctions under the Countering America's Adversaries Through Sanctions Act (CAATSA), targeting defence deals with Russia, were also expanded. After the Ukraine war: Full throttle The invasion of Ukraine triggered a rapid escalation, prompting sanctions from countries that were not participating earlier, including South Korea and Taiwan. Several sectors, including oil, energy, and banking, were placed under heavy sanctions from multiple countries. The EU launched its 11th sanctions package against Russia in 2023, barring trade and transport. This was followed by several other packages, including the most recent 18th package. The bans targeted oligarchs, defence firms, tech sectors, and entire industries. According to the BBC, 70 per cent of the assets of Russian banks were frozen, and some were excluded from SWIFT, a high-speed messaging service for financial institutions. Hundreds of major companies, such as Heineken, McDonald's, Starbucks, and Coca-Cola, stopped selling and producing goods in Russia. According to an NYT report, US President Joe Biden (2021-25) placed over 170 new sanctions on Russian entities between 2022 and 2024. The targets included oil and weapons production, tech procurement and banking. Biden vs Trump: Who did what? After a slew of sweeping tariffs by the Biden administration, Trump has not imposed any fresh sanctions on Russia since he returned to office in January, NYT reported in July. Numbers game 13,500: Total sanctions placed on Russia since February 2022, according to 2.1%: Russia's gross domestic product (GDP) contracted in 2022, according to International Monetary Fund (IMF) estimates. However, it rebounded in 2023 due to energy exports. IMF projects Russia's real GDP growth for 2025 at 1.5 per cent. 1.9 mbd: Russian oil was exported to India in 2024, up from 0.1 million barrels per day (mbd) in 2021, according to the International Energy Agency. India and China were the major importers in 2024, with New Delhi accounting for 1.9 mbd and Beijing at 2.4 mbd 41.4%: Russian news agency TASS stated that Russia's trade turnover with BRICS nations stood at $294 billion in 2023 (41.4 per cent of total foreign trade) and grew 2.4-fold compared with 2019-2020. Russian oil exports What does it mean for India? Maintaining its neutral stance, India continued to buy oil from Russia at discounted rates since 2022. However, the recent 25 per cent tariff, along with a 25 per cent penalty for buying Russian oil, imposed on India by Trump, may have long-lasting repercussions. Here are some ways in which tariffs can hurt imports from Russia: If geopolitical tensions escalate, Brent prices could spike, wiping out part of India's discount advantage. Washington could tighten enforcement on intermediaries, making it harder for Indian refiners to use non-dollar payment systems or insurers. Indian banks may become more cautious in processing Russia-linked trade, potentially delaying shipments or raising transaction costs. What's next Russia has long courted sanctions, but the ripple effects are now reaching India with the imposition of a 50 per cent tariff. Still, Prime Minister Narendra Modi says he is ready for the fight. As reported earlier by Business Standard, Modi on Thursday said that India would not compromise on the interests of its farmers, fishermen or dairy farmers, even if it meant him "paying a heavy price".
Economic Times
06-08-2025
- Business
- Economic Times
India caught in a bind on Russian crude after Trump tariff, may look to diversify further
Indian refiners are likely to go slow on import of oil from Russia and may double down on efforts to diversify their import basket further as New Delhi assesses the impact of US President Donald Trump's announcement of additional tariffs Trump issued an executive order on Wednesday doubling tariffs on goods from India to 50 per cent for continuing to import oil from Russia, which purportedly uses that revenue to fund its war with Ukraine. While the government has given oil companies a free hand to plan crude purchases keeping commercial viability in mind, refiners may look to boost imports from the US and other non-OPEC suppliers as a balancing act, three sources with knowledge of the matter said. After the latest tariff order, refiners would be adopting a cautious approach to Russian imports, they said, adding the government has so far not told them to stop or go slow on purchases from Moscow. Soon after Trump's executive order, officials went into a huddle, discussing possible fallout and alternatives. No official comment was immediately available on the latest US tariffs. India buys about 88 per cent of its crude oil, which is converted into fuels like petrol and diesel, from overseas. Russian oil made up for hardly 0.2 per cent of all crude oil that India imported till 2021. After Moscow invaded Ukraine, Russian oil was available at a discount to international benchmarks due to Western sanctions, and was quickly lapped up by Indian refiners. Russia is now India's largest oil supplier. India imports about 5 million barrels of oil a day, of which 1.6 million came from Russia in July. Sources said discounts on Russian oil have shrunk to less than USD 2 per barrel, not offering much economic benefit for buying from Moscow. But it will be near impossible to swiftly unwind the Russian imports given the volumes India now buys, they said, adding Middle East suppliers, which were the main source in the pre-Ukraine war era, may see a resurgence with the largest volumes. India is the largest importer of Russian crude ahead of China and Turkey. The US tariffs follow the European Union ban on the import of petroleum products (fuel) made from Russian crude starting in January 2026. India's Reliance Industries Ltd and Russian oil giant Rosneft-backed Nayara Energy Ltd will be those hit hard by the sanctions. The two, particularly Reliance, were the biggest exporters of fuel from India to Europe. India historically bought most of its oil from the Middle East, including Iraq and Saudi Arabia. However, things changed when Russia invaded Ukraine in February 2022. India, the world's third-largest crude importer after China and the US, began snapping up Russian oil that was available at a discount after some in the West shunned it as a means to punish Moscow for its invasion of Ukraine. From a market share of just 0.2 per cent in India's import basket before the start of the Russia-Ukraine conflict, Russia overtook Iraq and Saudi Arabia to become India's No.1 supplier, with a share as high as 40 per cent at one point of time. Last month, Russia supplied more than a third of all crude oil imported by India. India bought 68,000 barrels per day of crude oil from Russia in January 2022, according to global real-time data and analytics provider Kpler. That month, Indian imports from Iraq were 1.23 million bpd and 883,000 bpd from Saudi Arabia. In June 2022, Russia overtook Iraq to become India's largest oil supplier. Russian imports peaked at 2.15 million bpd in May 2023 and have varied - depending upon the discount at which the oil was available. But the volumes never slipped below 1.4 million bpd since then, which is more than what India was buying from its top supplier Iraq before the Russia-Ukraine conflict. G7 countries in December 2022 imposed a USD 60 per barrel price cap on Russian crude. Under the mechanism, European companies were permitted to transport and insure shipments of Russian oil to third countries as long as it is sold below the capped price -- an effort to limit the impact of the sanctions on global oil flows but ensure Russia earns less from the trade. Last month, the European Union decided to lower the price cap to USD 47.6 and introduced an automatic and dynamic mechanism for its review in the future. The idea is to keep the cap at 15 per cent lower than the average market price. In addition to stoking India's economy, cheap Russian oil gave refiners lucrative business -- refining that crude and exporting the products to deficit countries. These included the European Union, which had banned direct crude oil purchases from Russia. The bulk of the crude that goes to India from Russia arrives at ports in Gujarat, where Reliance Industries Ltd's Jamnagar refinery, the largest in the world, and Nayara Energy-owned India's second-largest refinery, less than 10 miles away at Vadinar, turned them into fuel.
Perth Now
21-07-2025
- Business
- Perth Now
‘Take it seriously': Huge China warning
Australia has been warned to take China's military build-up 'seriously', saying the threat of Beijing to the Indo-Pacific region is like the danger Russia poses to Europe. The Prime Minister spent much of last week touting Australia's trade, tourism and research offerings in Shanghai, Beijing and Chengdu. Securing peace through economic interdependence was a strategy the EU used with Russia following the collapse of the Soviet Union – a ploy that ultimately came back to bite the bloc when Russian tanks rolled into Ukraine. General Onno Eichelsheim is in Australia for Talisman Sabre – annual war games hosted by the Australian Defence Force, and said the country should 'get ready for something that you hope will never happen'. Speaking to the ABC, General Eichelsheim said Australia should not ignore the parallels between China and Russia. Dutch defence chief Onno Eichelsheim is urging Australia to boost its military spending. Dutch Ministry of Defence / Handout Credit: Supplied 'You should look at the facts that are around you … if Russia tells us that they want to have more, more influence, than take that seriously,' he said. 'And if you see in this case in this region, China building up, take it seriously and get ready for something that you hope will never happen. 'If you prepare for war, you can avoid war. And that's how we look at it.' During a press conference in China, NewsWire put to Mr Albanese that there were similarities between his approach to managing the relationship with Beijing and Europe's pre-Ukraine war approach to managing its relationship with Moscow. He denied there was. 'Our relationship is very different,' Mr Albanese said. 'And I don't think you can translate one thing across some other part of the world of which Australia is not a participant.' The Trump administration has called on the Albanese government to hike defence spending to 3.5 per cent of GDP, warning of an 'imminent' threat to the Indo-Pacific. The concern is driven by China's constant war drills around Taiwan and rapid military build-up, including a massive expansion of its atomic arsenal. NewsWire asked Prime Minister Anthony Albanese if he was concerned China posed a similar threat to China as Russia did to the EU. Joseph Olbrycht-Palmer / NewsWire Credit: NewsWire As of mid-2024, China's operational nuclear warheads exceeded 600, according to the US Department of Defense. That was nearly triple what the country was estimated to have in 2020. Deputy Prime Minister and Defence Minister Richard Marles has said build up was sparking 'security anxiety' in Australia. But Mr Albanese and his government have been firm to resist calls, both domestic and international, to boost the Australian Defence Force's budget. General Eichelsheim, whose country recently agreed to hike defence spending to 5 per cent of GDP in line with most of NATO, said a GDP percentage was not the only important measure, but that Australia would need to do more one way or another. 'It's not about the percentage, it's about the capabilities,' he said. 'But inevitably, I think Australia has to increase its capabilities as well, if you look at the region, and the build-up in this case of China. 'Also, if they need to help out Europe, which (Australia is) actually already doing – if you look at the war in Ukraine, and supporting us there.'
