India is playing an increasingly important role in global oil markets by buying cheap Russian oil and refining it into fuel for Europe and the US, said a Bloomberg report on February 5.
India shipped about 89,000 barrels a day of gasoline and diesel to New York last month, the most in nearly four years, said data intelligence company Kpler. The country supplied 1,72,000 barrels of low-sulfur diesel to Europe daily in January.
Under EU guidelines, India is likely operating within the rules. When Russian crude is processed into fuels in a country outside of the bloc such as India, the refined products can be delivered into the EU because they are no longer considered to be Russian. The Group of Seven nations wants to cut Russia’s revenue as much as possible, but also wants its oil and refined products to flow into the market to avoid a global supply crunch.
The experts quoted in the report expected India’s importance to expand after the fresh European Union sanctions on Russian petroleum exports. The ban is expected to remove a huge volume of diesel from the market, and witness more consumers, especially in Europe, look to Asia to cover the supply gap. This will make inexpensive Russian oil even more appealing to countries like India. Indian refiners, including public sector undertakings that have to deliver to domestic demand, raised their exports last year to profit from higher international prices, said the report. India itself relies on imports to meet around 85% of its crude needs.