Speaking before the Indian Parliament on Tuesday, Indian Oil Minister Hardeep Singh Puri told lawmakers the government was engaged in talks "at the appropriate level of the Russian Federation" to buy Moscow’s glut of oil created by a Western boycott.
"Discussions are currently underway. There are several issues to be gone into like how much oil is available," Puri said, adding that the government was weighing questions of insurance, freight and payment.
India is the world’s third-largest importer of oil after China and the United States, but gets just 3% of its petrol from Russia, according to Agence France-Presse.
The news follows talks last week between Puri and Russian Deputy Prime Minister Alexander Novak.
“What we have is a particularly privileged strategic partnership; the leaders of our countries maintain regular contact. Mutually beneficial cooperation is actively promoted, including the Arctic LNG 2 and Sakhalin 1 projects. Gazprom supplies LNG to India, and Rosneft continues its systematic work with its Indian partners. We are interested in further attracting Indian investment to the Russian oil and gas sector and expanding Russian companies’ sales networks in India,” Novak said in a statement on Thursday.
“Russia’s oil and petroleum product exports to India have approached $1 billion, and there are clear opportunities to increase this figure,” he added.
In response, on Tuesday, Washington sought to dissuade New Delhi from the deal: “think about where you want to stand,” White House spokesperson Jen Psaki said. However, she noted that India buying Russian oil wouldn’t violate US sanctions against Moscow.
“When the history books are written in this moment in time, support for Russia – the Russian leadership – is support for an invasion that obviously is having a devastating impact,” Psaki said.
So far, India has plotted a fairly neutral course on the situation in Ukraine, where Russia launched a special operation in late February to neutralize the country as a potential NATO springboard into Russia and eliminate neo-Nazi forces responsible for an eight-year-long war against Russian-speaking separatists in the eastern Donbass region. New Delhi has abstained during United Nations votes as the international drama plays out, and Indian Prime Minister Narendra Modi has urged Kiev and Moscow to settle their differences via direct talks.
“T]hat is the price to pay for India to maintain its strategic autonomy,” New Delhi web developer Shivansh Rajeev told the South China Morning Post on Sunday, referring to Modi’s attempts to balance Indian relations between competing power blocs. Despite the posturing, New Delhi has grown closer to Australia, the US and Japan in the Quadrilateral Security Dialogue or “Quad,” which is widely seen as an anti-China formation.
The US announced a total boycott of Russian petroleum and sanctioned Russia’s state-owned corporations Gazprom and Rosneft in response to Russia’s operation, and the United Kingdom announced it would phase out Russian oil imports by the end of the year. The two Anglo powers have pressured the European Union to follow suit, but many of the bloc’s members get the majority or a plurality of their oil from Russia, so the economic and social ramifications of a boycott are being extensively debated.
In fact, despite the move, Russians oil and gas condensate production rose to 11.12 million barrels per day in March, according to data obtained by Reuters.
Oil prices came back down below $100 a barrel on Tuesday, having spiked to $130 a barrel last week following US President Joe Biden’s announcement of the gas boycott.
"Oil prices might continue moderating this week as investors have been digesting the impact of sanctions on Russia, along with parties showing signs of negotiation towards (a) ceasefire," Tina Teng, an analyst at CMC Markets, told Reuters.
In response to the price spike, Biden has attempted to persuade Saudi Arabia and the United Arab Emirates to increase oil production to offset the loss of Russian oil, but neither Arab leader would answer the White House’s calls. On Thursday, Saudi state-owned oil firm Saudi Aramco announced a new deal to build a huge petroleum refinery and associated petrochemical complex in northeastern China capable of producing 300,000 barrels of oil per day.
In early February, China National Petroleum Corp (CNPC) signed a 10-year agreement with Russian state-owned gas firm Rosneft for refineries in northwestern China to receive 100 million metric tons, or 200,821 barrels per day of oil.
Iran has also been caught in the turmoil as efforts to revive the Joint Comprehensive Plan of Action (JCPOA ) - a deal to which both the US and Russia were parties - are nearing fruition. Moscow has sought to use the unresolved talks to secure an exemption for Iran in US sanctions, while the US has dodged claims it wants to “replace Russian oil with Iranian oil.”
“Whether or not there is a JCPOA, our posture toward Iranian oil ban would not change,” State Department spokesperson Ned Price told reporters Tuesday. “We would not replace Russian oil with Iranian oil. That would not be on the table."