Without Russian Oil Option, Global Prices for Middle Eastern Crude Oil Would Have Hit Sky: Expert

Without the Russian oil option, the global prices for Middle Eastern crude oil would have hit the sky, opined Archana Upadhyay, chair at the Centre for Russian and Central Asian Studies at JNU. Furthermore, it would have destroyed the developing economies struggling to come out of the Covid setback, she pointed out.

New Delhi:Despite sanctions on Russia, India continues to buy oil from Moscow, which has been in debate since the Russia-Ukraine conflict broke. India's imports of Russian oil have helped prevent a supply crunch by diversifying its sources of energy. By relying on multiple suppliers, India can mitigate the impact of disruptions in any one source, ensuring a more stable supply of oil to meet its energy needs. Additionally, importing oil from Russia, a major global producer, provides India with leverage in negotiations and helps maintain competitive pricing in the market.

ETV Bharat explores how India's imports of Russian oil can help lubricate the global market. An expert says that without the Russian oil option, the global prices for Middle Eastern crude oil would have hit the sky."It would have destroyed the developing economies struggling to come out of the Covid setback, Archana Upadhyay, chair at the Centre for Russian and Central Asian Studies at JNU, told ETV Bharat.

Meanwhile, US Ambassador to India Eric Garcetti has claimed the US had allowed India to buy Russian oil. “We allowed the purchase to take place to ensure the prices did not go up globally,” he said while speaking at an event organised by the Council on Foreign Relations in Washington last week.

Due to this arrangement, global oil prices didn’t shoot up and India delivered on that,” he added. Earlier last month, a visiting US Treasury official had also said the US had not asked India to cut Russian oil imports. “It is important to us to regulate the oil supply. But, what we want to do is limit Putin’s profit from it,” US Treasury Assistant Secretary Eric Van Nostrand, had said.

Commenting on Eric Garcetti's remark, Archana Upadhyay said, "Would India have accepted the US diktat on not buying Russian oil? Not to my mind. India is not a part of the sanction regime. It is free to engage with Russia, which it has done and will continue to do so.

She said, "The US has little choice, but to accept India's choices regarding its national interests...in this case, it is India's energy security. The Indian Foreign Minister made it amply clear that India's national interest would dictate India's choices and India's ties with Russia has been its steadiest relationship that has served India's interests well".

"Discounted oil prices have enabled India to control inflation at home. This proved to be critical in a country that was in an election mode. The Indian FM also said that India would be willing to buy oil even from the US if it could guarantee cheaper rates than the Russian oil", the expert opined.

She further explained that India is important to the US in its plans to contain China. This reality itself creates a lot of space for India. "It is noteworthy that Russian refined oil also found its way to the European markets through the Indian route. In other words, sanctions are hard to enforce. Buyers always find a way to get what they want", Archana Upadhyay added.

Recently, US officials have maintained the G7, European Union and Australia do not want Russian oil to be sold above $60 per barrel to curtail Moscow’s profit margin. This alliance also bans the use of Western insurance when tankers carry Russian oil priced above $60 a barrel.

It is worth mentioning that retiring US Under Secretary of State for Political Affairs Victoria Nuland, after a trip to India, had told the US Senate Foreign Relations Committee that India had 60 years of entanglement with Russia, which needed to end.

India, on the other hand, has allowed four Russian companies to provide marine insurance coverage to tankers. Historically, India and Russia have maintained a degree of strategic cooperation despite external pressures. India-Russia ties have historically been strong, characterised by defence cooperation, economic partnerships, and cultural exchanges. These ties have endured geopolitical shifts and continue to evolve.