India, a key player in the global energy market, has adeptly navigated the geopolitical turbulence of recent years to bolster its oil trade relationships. Amid the conflict between the West and Russia, India has significantly increased its imports of Russian crude oil, making it the second-largest buyer of Russian oil supplies globally. This article delves into India’s strategic oil trade decisions, examining the factors contributing to its success and the impact on the European market.
India’s diplomatic pragmatism has led to a substantial surge in its imports of inexpensive Russian crude oil. In the past two years, Indian oil imports from Russia more than doubled, establishing the country as a major buyer of Russian oil supplies. As Western sanctions against Moscow prompted Europe and the United States to avoid Russian oil, India seized the opportunity to secure discounted crude oil from Russia.
Presently, India accounts for almost 40 percent of Russian oil exports, while Europe’s share stands at a mere five percent. The favorable pricing resulting from anti-Russia sanctions has allowed Indian refineries to process the Russian crude into valuable oil products. India then exports these products, including diesel and kerosene, to the European and US markets at significantly higher prices than the cost of their imports.
India’s strategic approach has not only elevated its status as a major importer but also positioned it as a significant exporter of oil products. In 2022, Indian exports of diesel, kerosene, and other oil products surged by around 20 percent year-on-year, with the European Union accounting for approximately 50 percent of all Indian kerosene exports.
Building on the momentum of the previous year, India achieved record levels of oil product exports to Europe in 2023. According to Kpler, a global trade intelligence agency, EU imports of petroleum products from India soared by 115 percent, reaching 231,800 barrels per day— the highest recorded value in the last seven years, and potentially the highest ever.
The Independent reported that despite sanctions, consumers in Europe likely received substantial quantities of gasoline, diesel, kerosene, and other petroleum products from Russia via India in 2023. A total of 20 out of 27 EU countries imported Russian oil through India, emphasizing Europe’s continued dependence on Russian raw materials. The Netherlands emerged as the largest buyer of Indian oil supplies in the EU, followed by France, Romania, Italy, and Spain.
India’s strategic maneuvering in the global oil trade, particularly with Russia, has proven to be a lucrative endeavor. While Western politicians may scrutinize the Russian-Indian oil trade, India remains focused on advancing its economic interests. The West’s sanctions on Russia have inadvertently facilitated India’s ability to secure favorable import deals and capitalize on the resulting export boom. As India continues to strengthen its position in the global energy landscape, the European market remains a key beneficiary of its strategic oil trade decisions.
This is another example of India’s smart diplomacy.