India Urges Companies to Buy More Russian Oil Despite US Warnings

Russian Oil $37 Cheaper Than Brent
Pointed Out as a Major Loophole in US and EU Sanctions on Russian Oil

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Foreign media reported that the Indian government is urging state-owned oil companies to purchase more Russian crude oil, which is significantly cheaper compared to international oil prices. As imports of Russian crude oil by countries like India and China continue to rise, concerns are growing that the effectiveness of Western sanctions against Russia, led by the United States and the European Union (EU), will be substantially weakened.

On the 21st (local time), the Wall Street Journal (WSJ) cited senior executives from the Indian oil industry, reporting that "in recent weeks, government officials have strongly requested to continue importing Russian crude oil and to find ways to take advantage of the price reductions of Russian oil." It is known that Indian state-owned oil companies are currently negotiating additional supply contracts with the Russian oil company Rosneft.

Previously, although the U.S. government officially warned India about importing Russian crude oil, WSJ reported that imports of Russian crude oil, which is much cheaper than international oil prices, are actually increasing. Russian Ural crude oil is up to $37 cheaper per barrel compared to North Sea Brent crude, and from the perspective of the Indian government, which is facing severe inflation, imports are increasing, WSJ pointed out.

The Indian government denies issuing such directives to companies. An Indian government official told WSJ, "We do not interfere with or guide companies in their commercial transactions," emphasizing, "We only make policies; we cannot tell companies what to buy or not to buy." However, India's imports of Russian crude oil have increased more than 33 times, from an average of 30,000 barrels per day in February to 1 million barrels per day this month.

Indian oil companies are also reportedly exploring ways to continue bringing in Russian crude oil while avoiding European sanctions against Russia. About 80% of the tankers transporting Russian crude oil to Indian ports are affiliated with the European Union (EU), and since the EU plans to ban insurance for ships transporting Russian oil starting in December, WSJ reported that the Indian government is also discussing measures to support insurance to maintain imports of Russian crude oil.

There are also indications that Indian companies' methods to evade sanctions against Russia are evolving. According to vessel tracking service MarineTraffic and others, a tanker named 'Elandra Denali' transported Russian crude oil to a refinery owned by an Indian state-owned oil company on the 3rd, but this vessel has never visited Russia. It is known that this ship received various cargoes at sea from three other tankers that departed from Russian ports in the Black Sea and the Baltic Sea near Gibraltar.

This content was produced with the assistance of AI translation services.