New Delhi – india has significantly increased its reliance on Russian crude oil since Western nations imposed sanctions in 2022,becoming one of Moscow’s largest energy customers. The nation, which previously imported minimal amounts of Russian oil, now receives approximately 2 million barrels per day (b/d) of Russian “sour,” heavy crude, constituting 35-40% of its total crude imports. This strategic shift has lowered India’s import costs amidst rising domestic energy demand, driven by its status as the world’s fastest-growing major economy.

The discounted prices on Russian oil have enabled Indian refiners, including Reliance Industries and Indian Oil Corporation, to substantially increase their profits. These refiners process the crude into fuels, which are then exported at market rates, further bolstering the Indian economy. Data from the Petroleum Planning and Analysis Cell (PPAC) shows a consistent upward trend in Russian oil imports, notably benefiting ports like Sikka in Gujarat and Paradip in Odisha.

This increased trade with Russia has not been without scrutiny. Western governments have urged India to moderate its purchases, citing concerns about funding Russia’s war effort in Ukraine. Though, Indian officials maintain that their energy security needs are paramount and that they are navigating a complex geopolitical landscape to secure affordable energy sources. the move also allows India to diversify its energy sources, reducing dependence on conventional suppliers in the Middle East.

The impact extends beyond economics. Increased refining capacity utilization, spurred by the availability of cheaper crude, has led to investments in upgrading refinery infrastructure. For example, the planned expansion of the Panipat Refinery by Indian Oil Corporation is partially driven by the expectation of continued access to discounted Russian crude. This expansion is projected to increase refining capacity by 4 million metric tons per year.

Ancient Context: India’s Energy Dependence

India has historically been heavily reliant on oil imports from the Middle East,particularly Saudi Arabia and Iraq. However, geopolitical instability in the region and fluctuating oil prices have prompted India to seek diversification. Prior to 2022,India’s oil import basket was dominated by these Middle Eastern suppliers,accounting for over 70% of total imports. The current shift towards Russian oil represents a meaningful strategic realignment.

The global oil market has experienced considerable volatility in recent decades, influenced by factors such as OPEC production decisions, geopolitical conflicts, and technological advancements in shale oil production. India’s energy policy has consistently focused on ensuring energy security and affordability, leading to the exploration of alternative supply sources and investments in renewable energy.

Frequently Asked Questions about India’s Russian Oil Imports

• What percentage of India’s crude oil imports now come from Russia?

  Currently, Russia supplies approximately 35-40% of India’s crude oil imports, a considerable increase from near zero in 2021.

• How has importing russian oil benefited the Indian economy?

  Importing discounted Russian crude has lowered India’s import bill, boosted profits for Indian refiners, and supported economic growth.

• Which Indian companies are primarily processing Russian crude oil?

  Major Indian refiners like Reliance Industries and Indian Oil Corporation are key players in processing Russian crude.

• What are the geopolitical implications of India’s increased reliance on Russian oil?

  India’s decision has drawn scrutiny from Western nations but is viewed by India as a necessary step to ensure energy security.

• Are there any plans to further increase Russian oil imports in the future?

  India is likely to continue importing significant volumes of Russian crude as long as it remains economically advantageous and aligns with its energy security goals.

• How is the discounted Russian oil impacting India’s fuel exports?

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