Surprising as it may seem, all is well for Russian oil. The International Energy Agency records in its April report 8.3 million barrels of oil per day exported by the Russians, 600,000 more than the average for last year. The paper’s authors use the euphemism: “Russia appears to have little difficulty finding buyers.”
In this sense, there is no trace of the distinction that the Western bloc makes between its Chinese systemic competitor and its Indian strategic partner. As for crude, almost 40% of these record Russian sales are destined for India and the difference with what is sent to China does not exceed 100,000 barrels per day.
India buys, refines and resells Russian oil
And even if this was achieved first with massive discounts, they would not be as important as before. Alexander Potavin, a financial analyst at FG Finam in Moscow, insists on the rise in sales prices and also considers that his country’s oil companies “have adapted” to Western sanctions, establishing effective “channels” with the Asians.
The Indians who before the Ukrainian war imported practically no Russian oil now refine it more and more, with resale, as a finished product made in India, to Europe, but also to the United States.
On Tuesday, Indian Oil Corporation (IOC), which owns 40% of the nation’s refining capacity, posted a quarterly net profit that more than halved, with an operating margin that continues to grow. Three weeks after the invasion of Ukraine, IOC signed a first contract with a Russian company. Many others have followed since then.
The European Union is angry
Until now, the European Union has been careful not to dwell too much on the subject. But on Tuesday, in an interview with the British newspaper Financial Times, the head of the European executive’s diplomacy, Josep Borrell, delivered a rare explicit criticism. He urged EU member states to “act” on India’s resale of Russian oil as refined fuel, two-thirds diesel and the rest kerosene.
While he finds it understandable that India wants to take advantage of cheaper crude, his statement makes it “a hub” for the re-export of “by-products” of Russian origin. As a result, Europe is supposed to move towards restrictions.
India’s Foreign Minister, invited to Brussels on Tuesday for an unprecedented meeting on trade and technology exchanges with the EU, did not really appreciate the manner of the reception. Subrahmanyam Jaishankar said that he “does not see any basis” for such accusations. If Russian crude is “substantially transformed”, there is no longer any reason for him to consider it as Russian.
Already at the beginning of the year, questioned by the Austrian channel ORF, he had suggested that if Europe wanted to make it a matter of “principle”, that it then “cut” all energy ties with Russia, including indirect ones.
Inflation challenged by geopolitics
Everyone can deduce that New Delhi is now challenging Brussels to take the case before the governments of the 27, knowing that several of them, at the risk of inflation, express serious reservations about the idea of doing without these Indian products. even if they come from Russian raw material.
The European Commissioner for Competition, Margrethe Vestager, has understood this perfectly. Departing from the tone of her colleague in charge of foreign policy, she spoke with the head of Indian diplomacy, assuring that if there were “concerns to raise, it will be with an outstretched hand and not with an accusing finger.” Under these conditions, there is little doubt that Indo-Russian diesel will always be available at the pump.
Source: BFM TV
