India‘s Oil Purchases from Russia: Implications for Western Sanctions
India has made an unprecedented purchase of Russian oil worth $37 billion, according to a European think tank, which suggests that New Delhi’s largesse is undermining western sanctions imposed on Moscow due to its war with Ukraine.
The Centre for Research on Energy and Clean Air (CREA) analysis reveals that India has increased its purchase of Russian crude by over 13 times its pre-war amounts. The report acknowledges that India‘s purchases “amount to US strategic partner New Delhi stepping in to replace crude purchases by Western buyers,” and are “entirely legitimate.” In fact, it reveals that India refined some of the crude and exported it to the United States as oil products worth more than $1 billion.
Concerns Over the Shadow Fleet in Russian Oil Trade
However, an examination of shipping routes by experts suggests this huge volume of shipments might involve a so-called “shadow fleet” of crude tankers, specially created by Moscow to try to disguise who it is trading with and how, and maximize the Kremlin’s profits. CNN witnessed what is believed to be part of that complex trade off at the Greek port of Gythio earlier this month: Two oil tankers – one massive, the other smaller – sidled up next to each other for a ship-to-ship transfer, which involves passing crude oil between vessels, sometimes with the aim of disguising its origin and ultimate destination.
One is owned by an Indian-based company accused of involvement in sanctions violations, and the other was previously owned by an individual subject to separate US sanctions. The shipping monitoring firm Pole Star Global notes that transfers are (sometimes) done legally, but they’re also used as an illicit tactic to evade sanctions. “You’re adding multiple layers to the shell game of vessels as they try and confuse authorities as to where this oil is coming from and who’s buying it at the end of the day,” says David Tannenbaum at Pole Star Global.
India‘s Justification and Re-Export of Russian Oil
India has repeatedly asserted that it is well within its rights to purchase Russian oil and is not in violation of sanctions, amid mainly European disquiet at New Delhi re-exporting it as finished products. New Delhi has also said some European countries continue to buy Russian oil in even greater volumes than India. External Affairs Minister S.Jaishankar emphasized that “Our trade with Russia is at a very small level– USD 12-13 billion, in comparison to European countries. We’ve also given the Russians a set of products… I don‘t think people should read more into it other than the legitimate expectations of any trading country to increase its trade.”
Significant Increase in India‘s Purchases
The CREA report suggests that India‘s purchases have increased significantly since the onset of the Russia-Ukraine war that triggered the sanctions. Some of the more recent trades involve the shadow fleet Russia has devised. According to CNN, some oil trade between Russia and India is open and direct. It cited Windward, a maritime artificial intelligence company, which analyzed global shipping movements and detected 588 direct voyages by oil tankers from Russia to India last year.
However, Pole Star Global examined the same route and found over 200 trips last year by ships from Russia that performed a transfer in the Laconian Gulf to another ship, which went on to India. The net impact of India’s crude purchases has been to weaken the pinch Russian President Vladimir Putin feels from oil sanctions. Russia’s federal revenues ballooned to a record $320 billion in 2023 and are set to rise further still.
Roughly a third of the money was spent on the war in Ukraine last year, according to some analysts, and a greater proportion still is set to finance the conflict in 2024.
Original Article: India’s increased purchase of Russian oil is helping fuel Ukraine war: European think tank — Indiatimes