Indian refiners are possibly “re-exporting” Russian crude oil to other markets, triggering speculation that the South Asian nation is being used as a “backdoor” for Russian oil into Europe, a media report said.
British daily The Guardian cited several Western experts who have claimed that re-selling processed Russian crude, which Indian companies are sourcing at discounts to the tune of 30 percent, makes for an “understandable” commercial rationale.
“Indian refiners are clearly taking significant volumes of discounted Russian crude and then re-exporting a material proportion of refined product back out of the country,” Craig Howie, an analyst at Shore Capital, told the newspaper.
“Given the obvious strength of petrol and diesel prices, this presumably supports robust refining margins for Indian downstream players,” he added.
The Helsinki-headquartered Centre for Research on Energy and Clean Air has underlined that around 20 percent of exported cargo from India’s largest refinery in Jamnagar, a city in Gujarat state, were headed towards the Suez Canal last month.
“Shipments were made to France, Italy and the UK. However, there is no evidence that these shipments included Russian oil,” it added.
However, the think tank noted that the Jamnagar refinery, owned by Indian business conglomerate Reliance Industries Limited (RIL), received around 27 percent of its oil from Russia in May. In April, the refinery bought only 5 percent of its crude from Russian companies.
Amid the suspicions raised regarding Indian refiners, the newspaper quoted several industry sources as saying that “tracking hydrocarbons” is near to impossible.
Among the methods being employed to “hide the origin” of Russian oil reportedly include paying in Chinese remnibi (yuan) rather than dollars, transferring cargo to another ship, and hiding Russian transactions altogether by bartering for oil with commodities such as gold and food or weapons.
Many vessels are also said to be employing the method of “going dark” by switching off their automatic identification systems while at sea.
Crude oil prices have been at their highest level since the global financial crisis in 2008 in the wake of the US and European Union (EU)-led push to phase out Russian crude supplies from the international market in retaliation for Moscow’s special military operation in Ukraine.
European Council chief Charles Michel said last month that the 27-nation bloc would ban Russian crude imports by the end of this year. As of last year, the European Union (EU) sourced around 23 percent of its oil from Russia, according to the International Energy Agency (IEA).
Crude imports have been exempted from six rounds of economic sanctions imposed by the US and its allies against Russia since the Ukraine crisis.
However, China and India have significantly scaled up their purchases of Russian crude, more than making up for the loss in value incurred due to EU’s ongoing effort to cut off Russian oil purchases.
The US and the European Union (EU) has been critical of New Delhi’s decision to ramp up its purchases of Russian crude, with President Joe Biden calling out India for not being in sync with its Western partners as far as the response to Russia is concerned.
Biden claimed in March that India’s response to Moscow’s special operation was “somewhat shaky”.
Last week, National Security Council (NSC) Coordinator for Strategic Communications John Kirby said that President Biden would want India to “participate” in efforts to reduce Russian oil purchases.
India, meanwhile, has repeatedly defended the decision to ramp up its energy ties with Moscow, as the South Asian nation is facing its highest inflation in eight years, largely due to the escalating oil prices and supply chain disruptions.
At a security conference in the Slovakian capital Bratislava this month, Indian Foreign Minister S. Jaishankar urged the European powers to grow out of the mindset that "its problems are the world’s problems but the world’s problems are not Europe’s problems," while reacting to Brussels' criticism of New Delhi for buying Russian crude in spite of Western sanctions.
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