Chennai: In the case of the oil industry, India is now reaping the benefits of sanctions imposed on Russia by the West after the Russian invasion of Ukraine, reports IANS.
India now sources cheap oil from Russia, refine it, and supplies finished product to the West, supporting the demand there. The West has stopped importing oil directly from Russia following the sanctions it imposed on Moscow.
Though what India is doing now is against the wishes of the West, the Indian government has categorically said that it would source what it needs from where the price is advantageous.
The government also said its three oil marketing companies are not buying crude from Russia, but only the private companies are the ones who are buying, refining and shipping out.
Reports suggested that India's exports of petroleum products shot up to $78.58 billion for the period April 2022 to January 2023, from $50.77 billion shipped out during the previous year's corresponding period.
India's imports from Russia went up by about 384 per cent to $37.31 billion from April 2022-January 2023. As a result, Russia became India's fourth largest import partner, up from 18th position in 2021-22. This has prevented India from paying for the commodities in Rupees.
Sweta Patodia, AVP, Analyst, Moody's Investors, said, "Crude oil and international fuel prices have surged following the Russia-Ukraine war. Net realized prices for the oil marketing companies in India, however, have not increased at the same pace, which has resulted in significant marketing losses for them."
"While the marketing losses were steep in the first half of the fiscal year, it has narrowed since then."
Patodia said that the EU's cap on Russian crude purchases would have an impact on the overall crude oil market, but any assessment of specific impact will be speculative.
She then said, "Reduction in oil production from Russia, if not met by a corresponding increase in production from other producers or demand moderation, will reduce the overall supply relative to demand and may strengthen the crude oil prices."