Guwahati: India has been buying cheap oil from Russia since before that country invaded Ukraine, and this trend has continued to this day.
The western powers, who seek to weaken the Russian economy by reducing its reliance on oil, are opposed to this.
But the Indian government has definitely stated that it will purchase what it needs from locations where the cost is favourable.
Also, the government declared that none of its three oil marketing firms was importing crude from Russia. Private businesses are the only ones buying, refining, and shipping, though.
Media reports claim that between April 2022 and January 2023, India’s exports of petroleum products increased to USD 78.58 billion. This increased from the USD 50.77 billion shipped during the same time period the previous year.
India’s imports from Russia increased by almost 384 percent to USD 37.31 billion between April 2022 and January 2023, driven largely by the purchases of crude oil. Russia moved up from 18th place in 2021–2022 to become India’s fourth largest import partner as a result.
India has it easy because it can’t pay for the goods in Rupees because to the rising Russian oil imports.
Shweta Patodia, AVP, Analyst, Moody’s Investors Service said, “Crude oil and international fuel prices have surged following the Russia-Ukraine war. Net realized prices for the oil marketing companies in India, however, have not increased at the same pace which has resulted in significant marketing losses for them.
While the marketing losses were steep in the first half of the fiscal year, it has narrowed since then.”
After the Russian announced about cutting down oil production following the price cap, Patodia said, “Reduction in oil production from Russia, if not met by a corresponding increase in production from other producers or demand moderation, will reduce the overall supply relative to demand and may strengthen the crude oil prices.”
According to a recent credit rating report by ICRA on Oil and Natural Gas Company Limited (ONGC), the assets in Russia owned by the latter’s subsidiary OVL were impacted by geopolitical difficulties and normal activities in these are anticipated to resume soon.