The average price of Russian oil shipped to top importer India in October increased to $84.20 per barrel, way above the $60 price cap agreed by the G7 nations in December last year, Reuters reported.
India, the world’s third-largest importer and consumer of oil, has emerged as the largest buyer of Russian oil, as Western nations cut purchases after Moscow launched its full-scale invasion of Ukraine more than a year ago.
India Imports of Russian Oil Defy G7 Price Cap
According to Reuters calculations based on the most recent data released on the Indian Trade Ministry’s website, India has emerged as the largest customer of Russian oil, paying more than the price caps of Western countries.
In September, it paid an average of $81.24 per barrel. It paid the highest price so far in October, at $84.20 per barrel.
Russia has risen to become India’s top supplier of oil, accounting for 40% of the country’s imports in the first half of fiscal year 2023-24, the report said.
Crude oil from Iraq and Saudi Arabia, India’s second and third-largest oil suppliers, averaged $85.75 per barrel and $98.77 per barrel,respectively, in October, as reported by Reuters, citing available data.
India is dependent on oil imports since domestic oil production has failed to keep up with increasing demand. It has purchased oil from Russia at lower costs in an effort to reduce its oil import bill, taking advantage of lower prices due to Western sanctions that began early last year.
As per the report, India relied on Russian oil at a time when prices were high due to production cuts by the world’s top oil-producing countries. At $84.20 a barrel, Russian crude oil was the cheaper option in an increasingly tight global oil market.
Apart from direct Russian supply, Indian refiners also receive Russian oil from ports in Greece, Spain, and Korea, the report said.
Indian Govt Defends Decision
The Indian government has defended its decision to defy Russian sanctions, claiming that it was bound to take advantage of lower pricing wherever possible.
Last year, Indian External Affairs Minister S. Jaishankar, said, “As the world’s third-largest consumer of oil and gas, a consumer where the levels of income are not very high, it is our fundamental obligation to ensure that the Indian consumer has the best possible access on the most advantageous terms to international markets.”
“In that aspect, we have quite honestly seen that the India-Russian relationship has worked to our advantage. If it works to my advantage, I would like to keep that going,” Jaishankar added.
To limit Russia’s revenue and remove loopholes in the process designed to punish Moscow for invading Ukraine, the US imposed sanctions last month on marine companies and vessels shipping Russian oil priced above $60.