India’s importance in the fuel market will increase after new EU sanctions against Russian oil exports come into effect on Sunday, February 5.
After the strengthening of sanctions against Russian oil and oil products by Western countries, India has turned into an important supplier of fuel on the world market. This country buys an increasing amount of cheap Russian oil and processes it into fuel, which ends up in Europe and the USA.
As informs Bloomberg, it brings huge revenues to India, but the West does not object.
The authorities in New Delhi are not criticized because they are helping to achieve the two main goals of the West: to reduce Moscow’s income from energy sources and to avoid the shock of a reduction in the supply of oil in the market.
“U.S. Treasury officials are pursuing two main goals: to maintain supply in the market and to deprive Russia of oil revenues. They know that Indian and Chinese oil companies can make a lot of money by buying cheap Russian oil and exporting refined products at market prices,” said Ben Cahill, an analyst at the US Center for Strategic and International Studies.
India supplied about 89,000 barrels of gasoline and diesel to New York last month, the most in four years, according to data from analyst firm Kpler. In addition, diesel exports to Europe rose to 172,000 barrels per day in January, the highest level since October 2021.
India’s importance will increase after new EU sanctions against Russian oil exports come into effect on Sunday, February 5. This embargo will remove a lot of diesel from the market, and more consumers, especially in Europe, will turn to Asian refiners to cover the supply shortfall.
According to EU rules, India operates within the rules. When Russian oil is processed into fuel in a country outside the EU bloc, the refined products can be shipped to the EU because they are not considered Russian.
India has not publicly announced whether it is abiding by the upper limit on the price of Russian oil, but Western sanctions have pushed Russian oil below $60.
A US National Security Council official said the price cap was put in place so that countries like India could continue to supply the energy market while limiting the Kremlin’s revenue.
We will remind, on February 4, the Council of the European Union approved the maximum price for gasoline and diesel fuel from Russia at the level of $100 per barrel, and for products sold at a discount – at the level of $45 per barrel. The restrictions will come into effect on February 5, 2023.