Oil’s new map: how India turns Russia crude into the West’s fuel
- When Russian crude is processed into fuels in India, the refined products can be delivered into the EU because they’re not deemed to be of Russian origin
- New Delhi has faced little public blowback because it’s meeting the West’s twin goals of crimping Moscow’s energy revenue while preventing an oil supply shock
India is playing an increasingly important role in global oil markets, buying more cheap Russian oil and refining it into fuel for Europe and the US.
Yet New Delhi has faced little public blowback because it’s meeting the West’s twin goals of crimping Moscow’s energy revenue while preventing an oil supply shock. And as Europe ramps us sanctions, India is only going to become more central to a global oil map that’s been redrawn by Vladimir Putin’s year-long war in Ukraine.
“US treasury officials have two main goals: keep the market well supplied, and deprive Russia of oil revenue,” said Ben Cahill, a senior fellow with the Center for Strategic and International Studies, a Washington think tank. “They are aware that Indian and Chinese refiners can earn bigger margins by buying discounted Russian crude and exporting products at market prices. They’re fine with that.”
India shipped about 89,000 barrels a day of gasoline and diesel to New York last month, the most in nearly four years, according to data intelligence firm Kpler. Daily low-sulfur diesel flows to Europe were at 172,000 barrels in January, the most since October 2021.
The Asian nation’s importance is expected to expand after fresh European Union sanctions on Russian petroleum exports take effect on Sunday. The ban will remove a huge volume of diesel from the market and see more consumers, especially in Europe, tap Asia to fill the supply gap.
That will make cheap Russian oil even more attractive to India, which relies on imports to meet around 85 per cent of its crude needs. The nation’s refiners, including state-run processors that are responsible for meeting domestic demand, ramped up exports last year to profit from higher international prices.
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