India May Buy Oil From Russia At Heavy Discount; US Says It Won't Be Sanctions Violation

India may buy 3.5 million barrels of crude oil from Russia at ¡°deep discounts¡±, sources have told TOI.

As a part of the deal that India is likely to close soon, Russia will also take care of shipping and insurance for delivering the crude to India.

Oil minister Hardeep Puri on Monday had told the Rajya Sabha that India was looking into a Russian offer of discounted oil. As per TOI¡¯s report, the said oil will be delivered over a few months.

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However, the Centre is yet to work out the payment mechanism. Reports suggest that a Rupee-Rouble arrangement may have been finalised. A decision is expected over the next few days.

So far, India has abstained from taking any stand in the Russia-Ukraine war except that of resolution via dialogue. The White House earlier on Tuesday had said that if India were to take up the Russian offer of discounted oil, it would not violate sanctions deployed by Washington.

US¡¯ comments on the deal

Officials of the Biden administration have shown an understanding of India's position and have told lawmakers that New Delhi has a major dependence on Russian military supplies for its national security.

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"Our message to any country continues to be that abide by the sanctions that we have put in place and recommended," White House Press Secretary Jen Psaki told reporters at her daily news conference on Tuesday.

Psaki further said, "I don't believe this would be violating that (sanctions)."

"But also think about where you want to stand when history books are written at this moment in time. Support for the Russian leadership is support for an invasion that obviously is having a devastating impact," Psaki added.

What experts say

Indian-American Congressman Dr Ami Bera expressed disappointment over reports that India is contemplating buying Russian oil at a steeply discounted rate.

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"If reports are accurate and India makes this decision to buy Russian oil at a discounted price, New Delhi would be choosing to side with Vladimir Putin at a pivotal moment in history when countries across the world are united in support of the Ukrainian people and against Russia's deadly invasion," he said.

India and its oil needs

India depends on imports to meet 85% of its oil need. At 3.6 million tonne, Russian crude accounted for 2% of 176 million tonnes imported by India between April 2021 and January 2022.

In what has turned out to be a volatile streak, oil has tumbled into a bear market after losing more than 20% since closing at the highest level since 2008 just over a week ago. Caught between Chinese lockdown, Russia-Ukraine war & Iran nuclear talks, oil futures in New York declined for a second session and closed below $97 a barrel while Brent settled below $100.

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