India is exploring the possibility of buying oil from Russia amid sanctions imposed by Western countries in the wake of its invasion of Ukraine.
India’s petroleum and natural gas minister, Hardeep Singh Puri, said in parliament Tuesday that the government was having discussions with Russia on crude oil purchases.
“I myself have had a conversation with the appropriate levels of the Russian federation. There are discussions currently underway,” he told lawmakers. Puri said that the government was looking at issues such as availability and payment for the crude.
A report in the Times of India newspaper said that India is close to finalizing a deal to buy 3.5 million barrels of Russian crude at “deep discounts.” It attributed the report to people aware of the development but who requested anonymity to discuss the matter.
India is the world’s third largest importer of oil, depending on crude from overseas for over 80% of its needs.
The bulk of its supplies come from the Middle East and the United States, with Russian crude accounting for only about three per cent of its imports.
But the wild fluctuation in international prices following the outbreak of fighting in Ukraine has raised worries about the impact of a ballooning oil import bill on the nascent economic recovery that the country has posted in the last year.
Analysts say New Delhi’s talks on the purchase of crude from Moscow signal that India will keep the doors to trade with Russia open.
Russia has urged India to increase oil exports and investment. In a statement last Friday, Russian Deputy Prime Minister Alexander Novak said that Russia’s oil and petroleum product exports to India have approached $1 billion and there are “clear opportunities to increase this figure.” He also told Petroleum Minister Puri that Moscow was “interested in further attracting Indian investment to the Russian oil and gas sector and expanding Russian companies’ sales networks in India.”
Asked about the possibility that India could take up the Russian offer of discounted crude oil at her daily press briefing on Tuesday, White House Press Secretary Jen Psaki said, “Our message to any country continues to be that abide by the sanctions that we have put in place and recommended. But I don't believe this would be violating that (sanctions).”
“But also think about where you want to stand when history books are written in this moment in time. And support for the Russian leadership is support for an invasion that obviously is having a devastating impact,” she added.
While the United States has banned Russian oil imports, the European Union has issued sanctions against some Russian companies without banning the purchase of Russian oil.
Resisting pressure from the United States and other Western allies, India has abstained from voting against Moscow at the United Nations. Analysts cite the country’s huge dependence on Russian weapons for its position.
India has called for an end to violence and a diplomatic solution to the crisis in Ukraine. But New Delhi has found itself in a difficult situation as it tries to balance its longstanding ties with Russia with its growing strategic partnership with Washington, that is seen as critical in countering China.