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India seeking alternative to Russian oil amid US sanctions

India seeking alternative to Russian oil amid US sanctions Photo: India is looking for replacement of Russian oil (Getty Images)

Due to the sanctions imposed by the United States and pressure from the Russian Federation to pay in yuan, India is gradually refraining from buying Russian oil, writes Bloomberg.

Although Russia is still the dominant supplier to India, there is currently a tendency in the country to increase imports from elsewhere.

In particular, deliveries from Saudi Arabia this month increased by 22% compared to January. So, the largest private Indian refinery Reliance Industries Ltd. bought the largest amount of Saudi oil since May 2020, according to Kpler.

Difficulties in purchasing Russian oil

It is noted that Indian refiners would not mind taking more Russian oil, but to increase the purchase again, US approval for the purchase is needed.

Currently, the price of Russian oil is only cheaper by $2-4 per barrel. Previously, discounts on Russian oil exceeded $30, but such significant discounts are unlikely to return due to competition from China.

India's import of Russian oil surged after the full-scale invasion, as refineries took advantage of cheaper barrels that other buyers were avoiding.

Last year, at the peak of oil production, OPEC+ accounted for nearly half of the country's purchases, but new US sanctions recently halted some shipments.

Additionally, Moscow demands payment in yuan due to heightened control by certain banks on the use of dirhams for settlements over the past few months, further complicating the process for India.

After the start of the Russian invasion of Ukraine, India dramatically increased trade with Russia, in particular by buying its oil, which brings income to the Kremlin's military machine.

According to data from the Rating group, as of February 2024, the majority of citizens consider the following countries friendly towards Ukraine: United States and United Kingdom (81% each), Germany (80%), Poland and Lithuania (79% each), Canada (78%), France (70%), and Japan (55%).