Speaking to Financial Times, European Union (EU) Foreign Policy High Representative Josep Borrell called for the bloc to reduce importing India’s oil, which the companies are reselling after refining Russian crude.
Overview
Borrell said the bloc recognised that Indian companies were processing Russian oil and reselling it as diesel and gasoline to the EU. He said this is “certainly a circumvention of sanctions and member states have to take measures.”
Nevertheless, Borrell admitted that it is “normal” for India to purchase Russian oil at lower prices.
He added, “If they sell, it is because someone is buying. And we have to look at who is buying.”
However, he said that the $60 price cap imposed by the Western allies on Russian oil serves a dual purpose of limiting Russia’s funds while simultaneously ensuring the availability of oil.
Pleased to welcome @DrSJaishankar in the margins of the 1st EU-India #TTC Ministerial today
— Josep Borrell Fontelles (@JosepBorrellF) May 16, 2023
We discussed on India’s @G20 presidency, Ukraine’s peace initiative, the expanding security & defence pillar of our bilateral cooperation, and regional matters in the Indo-Pacific. pic.twitter.com/igsdSFVrNN
The comments came ahead of Borrell’s scheduled meeting with Indian External Affairs Minister S. Jaishankar in Brussels, where the EU chief will address this issue.
Jaishankar Responds
Jaishankar reacted sharply to Borrell's claims, saying that a reading of the EU’s regulations, particularly Regulation 833/2014, clearly shows that Russian crude “substantially transformed in a third country” will not be treated as a Russian product.
Following the Indian Minister’s statement, the EU’s executive vice president, Margrethe Vestager, said, “There is no doubt about the legal basis of the sanctions. Of course, it is a discussion that we will have with friends but it will be an extended hand and not with a point finger.”
"Look at EU council regulations, Russian crude is substantially transformed in 3rd country & not treated as Russian", EAM Jaishankar responds to EU Foreign policy chief Borrell's remarks calling for action against Indian refined products from Russian crude https://t.co/Wb19fOvNqM pic.twitter.com/c24nLoRNna
— Sidhant Sibal (@sidhant) May 16, 2023
India Emerges as Largest Supplier
In May, Kpler, an analytics firm, released data showing that India has become Europe’s largest supplier of refined fuels, as iNew Delhi continues to import a record-high amount of Russian crude.
Moreover, the Finnish Centre for Research on Energy and Clean Air has included India in a list of “Laundromat” countries which procure Russian crude and sell processed products, such as diesel, to Europe. This allows Moscow to sidestep Western sanctions by exploiting the “loophole” in the price cap.
India has also become the largest importer of Russian crude oil following its invasion of Ukraine in February 2022. Indian companies have been purchasing discounted crude oil, processing it in refineries, and reselling it as fuels to Europe. In fact, Russia’s Rosneft and India’s Indian Oil Corporation have agreed to enhance and diversify oil-grade deliveries.
In the past, several European leaders have criticised New Delhi for continuing to buy Russian oil, which they claim is helping Russia fund its military activities in Ukraine.
Nevertheless, New Delhi has maintained that the imports are necessary to ensure energy security.