These reports are only partly true as India has been exporting refined oil products for many years. India has been importing crude oil from a number of countries. Lately, India has substantially raised its crude oil imports from the US, with the country’s share in India’s crude basket hitting a record 14.3 percent in December. While Russia has become the top source of crude oil with a share of 21.2 percent in December, India reduced its dependence on Iraq (16.9 percent), UAE (6 percent) and Kuwait (4.2 percent) to accommodate more crude imports from the US. In December, crude oil imports from the US shot up 93 per cent to 3.9 million MT.

India hardly imported crude oil from Russia till 2021. Huge transportations costs made Russian crude oil very expensive compared to India’s nearby import sources from West Asia. Incidentally, India’s first greenfield private sector refinery at Jamnagar in Gujarat, put up by Reliance Industries (RIL), was granted export-oriented status as early as in April, 2007. It used imported crude oil, mostly from West Asian suppliers, to make refined products for the purpose of export. The RIL refinery has an installed capacity of 1.24 million barrels per day, making it the world’s largest refinery.

The situation changed after the Russia-Ukraine war began in February, last year. The western trade and financial embargo on Russia forced the latter to sell its oil and other products at large discounts. Oil imports suddenly became much cheaper from Russia. This made India go for Russian crude oil as the country’s energy market is 87 percent dependent on imported oil. Till 2020-21, India’s purchase of crude oil from Russia was less than one percent of its total oil imports. India bought only 419,000 tonnes of crude oil from Russia in the first 10 months of 2020-21, which was 0.2 per cent of the total import of 175.9 million tonnes. India exported refined petroleum products worth US$49 billion in 2021, making the country the world’s third largest refined petroleum exporter. The main export destinations were Singapore ($4.59 billion), the US ($3.56 billion), the Netherlands ($2.89 billion) and Australia ($2.62 billion). India’s fastest growing export markets for refined petroleum during 2020 and 2021, well before the Russia-Ukraine war, were the US, Australia and Togo.

Thanks to cheaper Russian crude oil and higher export demand for refined products since the outbreak of the Russia-Ukraine war, India’s refined petro-products exports are going up. However, it should be noted that India's total annual refined fuel exports in 2022-23 were actually lower than a year earlier as some refiners shut units for maintenance in the later half of 2022. The country’s domestic consumption of petro-products during the last financial year rose over 10 percent year-on-year to a record 222.3 million tonnes. The value of India’s crude oil imports in the last fiscal was estimated at $158.3 billion, up from $120.7 billion in the previous year. Last year, Russia became the top crude oil supplier to India, displacing Iraq for the first time. Interestingly, Russia has also overtaken Saudi Arabia as China's top oil supplier.

In contrast, Saudi Arabia, boasting one of the world’s largest oil reserves and making billions of dollars from oil exports every year, has overnight become a big importer of Russian oil to step up exports to NATO countries. Despite objections from the US, petroleum-rich Gulf countries are capitalising on cut-rate Russian oil prices. Saudi Arabia’s annual crude petroleum exports would be worth $140 billion. In addition, it has been exporting refined petroleum, ethylene and propylene polymers, and acyclic alcohols. It exports mostly to China, India, Japan, South Korea and the UAE. The only reason behind the Arab kingdom’s sudden large imports from Russia is to capitalise on the price difference. Over the past several months, Saudi Arabia has been importing record volumes of oil from Russia. Saudi Arabia and the UAE are buying large quantities of Russian oil at low prices to export at high prices to Europe with the US watching helplessly. Russian oil is getting a backdoor entry to the EU via Saudi Arabia and the UAE, America’s two reliable West Asian allies.

According to reports, Saudi Arabia imported 174,000 barrels a day of diesel and gas-oil from Russia in April and even more during last month, as per data compiled by Bloomberg from analytics firm Kpler. The Saudi kingdom became Europe’s top supplier. Record volumes of Russian diesel poured into West Asia in March as traders cashed in on low prices to stock up the fuel at the UAE’s Fujairah hub and in Saudi Arabia. West Asia has quickly become a major supplier of the industrial fuel to Europe and Africa. Russian oil is helping higher output from Saudi and Kuwaiti refineries. The West Asian region took up over 10 percent of Russia's exports in February and March.

The backdoor trade of Russian oil to the EU by some of the diplomatic allies of the US in West Asia shows how futile and ill conceived the US and NATO sanctions on Russia, especially those covering the energy sector. Western nations are unsuccessfully trying to cut Russian income from oil and gas. The EU and G7 countries had set a maximum price of $60 per barrel for Russian crude. Notably, the EU did not impose sanctions on Russian gas as Europe is heavily dependent on Russian supplies to meet around 40 percent of its gas needs. Overall, the US-led western trade and financial sanctions have hardly impacted Russia.

Thanks to its good friends such as China, India, Saudi Arabia, the UAE, and Iran, Russia posted a record current account surplus of $227 billion in 2022. As imports fell, Russia’s trade balance swelled to $282.3 billion, last year, from $170.1 billion the previous year. Ironically, Russia seems to be enjoying the western trade sanctions. More than a year after Russia’s invasion of Ukraine, European governments are now questioning the impact of sanctions on Russia. The NATO-backed Ukraine war is escalating with the time, putting increasing pressure on European economies. (IPA Service)