New Delhi: Western sanctions imposed on Russia have “carve outs” to avoid impact on energy imports from that country, New Delhi has found in an initial analysis of the sanctions, ThePrint has learnt. Hence, India has and can exercise the option of meeting its energy import requirements from Russia, although a government-to-government deal has not yet been worked out, top-level official sources said.
The Indian economy is “highly dependent” on energy imports — nearly 85 per cent of its crude oil requirement (five million barrels a day) has to be imported, the sources said.
However, owing to US sanctions, India had banned importing oil from Iran and Venezuela, posing “significant challenges to the country’s energy security”, they added.
“Geopolitical developments have posed significant challenges to our energy security. For obvious reasons, we have had to stop sourcing from Iran and Venezuela. Alternative sources have often come at a higher cost,” an official who did not wish to be named, told ThePrint.
“The jump in oil prices after the Ukraine conflict has now added to our challenges. The pressure for competitive sourcing has naturally increased,” the official added.
India is presently studying the unprecedented economic sanctions that have been imposed on Russia for its Ukraine invasion. The exercise is being led by the ministry of finance, along with the ministry of external affairs, ministry of commerce and industry and the ministry of petroleum, among others.
Various countries continue to import oil, gas from Russia
According to sources, two major Russian banks — which are the main channels for European Union payments for Russian energy imports — have not been excluded from the SWIFT banking mechanism.
Russian oil and gas is being procured by various countries across the world, particularly Europe, the sources said, adding that about 75 per cent of Russia’s total natural gas exports is to OECD (Organisation for Economic Co-operation and Development) Europe, like Germany, Italy and France.
European countries like the Netherlands, Poland, Finland, Lithuania, Romania, are also large importers of Russian crude oil, and continue to be despite the Russia-Ukraine war raging on.
Currently, India’s energy requirements are sourced from West Asia — 23 per cent from Iraq, 18 per cent from Saudi Arabia and 11 per cent from the UAE, according to official data. The USA has also now become an important crude oil source for India, accounting for 7.3 per cent.
According to sources, while imports from the US are expected to increase substantially in the current year, probably by around 11 per cent, its market share will be 8 per cent.
On the contrary, Russia has been a marginal supplier of crude oil to India, which is less than 1 per cent of the total requirement. Hence, it is not among top 10 suppliers for India when it comes to crude oil.
‘India’s legitimate energy transactions should not be politicised’
“India has to keep focusing on competitive energy sources. We welcome such offers from all producers. Indian traders too operate in global energy markets to explore best options. Countries with oil self-sufficiency or those importing themselves from Russia cannot credibly advocate restrictive trading,” said the official quoted earlier.
“India’s legitimate energy transactions should not be politicised,” the official added.
This came after Petroleum and Natural Gas Minister Hardeep Singh Puri said in Parliament Tuesday that the government was having discussions with Russia on crude oil purchases.
“I myself have had a conversation with the appropriate levels of the Russian Federation. There are discussions currently underway,” he had said.
Ministry of External Affairs spokesperson Arindam Bagchi said Thursday: “India does import most of its oil requirements. So, we are always exploring all possibilities in the global energy market because of this situation that we face importing our oil requirements. I don’t think Russia has been a major supplier.”
(Edited by Gitanjali Das)