Russian oil, which
the West is trying hard to refuse, is now coming at a discount to India,
according to a Bloomberg report citing unnamed sources. Much of the Western
world is trying to break away from its dependence on Russian oil owing to its ‘invasion’
of Ukraine. Consequently, Russian oil merchants are offering steep discounts to
India, a country which has maintained its close ties to Moscow, in the face of global
are being offered. Russian flagship fuel, the Urals grade, is coming to India
at a discount of $35 per barrel. This is expected to aid the south Asian nation
which has recently witnessed a steep rise in fuel prices after prices remained
stagnant for four months owing to provincial elections.
companies in India have raised prices almost daily since March 22. This has
also enabled overall inflation.
The Reserve Bank
of India (RBI), India’s central bank, has observed that the Russian invasion of
Ukraine and the supply-chain bottlenecks caused is having a detrimental effect
on the global economy and also has the potential to derail India’s economic
recovery following the coronavirus pandemic.
At such a time, Russian
oil at discounted rates is expected to help the Indian economy. Russian wants
India to buy 15 million barrels of oil this year, which is already part of its
contract, the report said. Talks at the government level are underway.
India is the
second-largest importer of oil in Asia. And with Europe snubbing Russian oil,
barrels of Moscow oil are flying into Asia with both India and China gulping them
has also offered rupee-rouble denominated payments through Russian messaging
platform SPFS. Russian Foreign Minister Sergei Lavrov is in India on a two-day
visit. Having arrived on Thursday, Lavrov is expected to work out the payments
system with Indian authorities.
While India does
import a lot of oil, not much of it comes from Russia. “India’s intake of
Russian oil has been very small for many, many years,” according to Vandana
Hari, a Singapore-based market analyst. As such the Indian refineries are not
configured to buy a lot of Russian oil. Therefore, even though Russian oil is
coming at a discount to India, the country might have a limited appetite for it.