Kpler, an analytics firm, released data reporting that India has become Europe’s largest supplier of refined fuel as it continues to import a record-high amount of Russian crude.
Overview
The report highlighted that since banning Russian oil, Europe has become increasingly reliant on India, importing over 360,000 barrels daily from the Asian country.
Bloomberg referred to the development as “double-edged” for the EU. Since Russia began its military offensive in Ukraine, the bloc has been looking to reduce its reliance on Russian oil to cut off Moscow’s funds to finance the war.
However, securing the refined oil from India, which has meanwhile enhanced its imports of Russian oil, not only increases demand for Russian oil but will also cost Europe more due to additional freight costs.
The increased cost will make it even more difficult for smaller oil refiners that cannot afford the crude, enhancing their concerns about energy security in the bloc.
India is on track to become Europe’s largest supplier of refined fuels this month while simultaneously buying record amounts of Russian crude. Russian oil is finding its way back into Europe despite all the sanctioning and India is ramping up fuel exports to the west.#Velsig… pic.twitter.com/xD79f4ix7G
— Velina Tchakarova (@vtchakarova) April 29, 2023
Accordingly, 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.
The Helsinki-based organisation further highlighted that a large part of the exports were shipped from the Vadinar port — 49.13% of which is owned by Russia-based Rosneft. “This situation where a Russian company owns an oil refinery in a third country highlights a possible way of circumventing sanctions,” the report stressed.
India Imports Record-High Amount of Russian Oil
CHART OF THE DAY: The US imported a record amount of refined oil products from India in February, according to newly released @EIAgov monthly data.
— Javier Blas (@JavierBlas) April 28, 2023
Where's India buying the crude?
I'm shocked, shocked... etc, etc, etc... #OOTT pic.twitter.com/HDGg7FEexW
Kpler data emphasised that India imported over 2 million barrels of Russian oil daily in April, accounting for about 44% of its oil imports.
Since the war in Ukraine, Russia has been offering discounted oil to India. As a result, Russia emerged as India’s largest crude oil importer in February. Meanwhile, in April, India retained its position as the largest importer of Russian crude for the fifth consecutive month.
This is despite a West-imposed price cap of $60 per barrel.
While Western countries have criticised India’s decision, New Delhi has maintained that the imports are necessary to ensure energy security.
In February, India imported $3.35 billion worth of Russian oil, bringing in over 2,000,000 barrels daily. In comparison, it imported $2.3 billion and $2.03 billion worth of crude from Saudi Arabia and Iraq, respectively.