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As a rising India becomes the ‘launderer’ of Russian oil, doubts over Western security ties grow
Sitting at the top of a business empire that spans fossil fuels, telecoms and retail, he is India’s – in fact, Asia’s – richest person. Like India’s ascendant Prime Minister Narendra Modi, he hails from the western state of Gujarat, and is one of the country’s most visible and powerful tycoons.
Among his international targets is Australia, where he is aiming to develop energy projects worth billions of dollars in the coming years. His name, contrary to what most Australians with a passing interest in sub continental business and politics might think, is not Gautam Adani, the moustachioed head of his eponymous company.
It is Mukesh Ambani. The 66-year-old, whose Reliance Industries is India’s largest company by market capitalisation, has a personal fortune estimated by Bloomberg at $US84 billion ($132 billion). Few businesses have been more important to the amassing of that wealth than Reliance’s oil refineries.
Those refineries are now at the centre of an international game of intrigue being played at the highest levels between the West on one side and its substantial band of critics on the other. How it came to be, and how it evolves, could well have significant implications not only for the wealth of people such as Mr Ambani, but for Australia’s very own security ties.
Desperate seller, willing buyer
At the heart of the game is the oil trade between Russia and India, for so long a mere footnote in the trading accounts of the world’s energy users. Whereas India historically bought negligible amounts of Russian oil, that all changed in February last year when Vladimir Putin made the fateful decision to invade neighbouring Ukraine.
It was an act of naked aggression that shocked the world. It was also a decision that tipped the world’s energy markets on their heads and prompted Moscow’s biggest energy customer – Europe – to try to wean itself off Russian supplies by the end of that year.
Virtually overnight, India went from buying a few thousand barrels of Russian oil a day to more than a million. In September, India bought more than 1.5 million barrels of Russian oil, or roughly 20 per cent of its exports
Ian Hall, an international political scholar at Griffith University, said there was little doubt the burgeoning oil trade between Russia and India was one of convenience for both sides. He said Russia was getting a willing buyer for exports that had been shut out of western markets, while India was able to hoover up big amounts of energy for its growing economy.
But Professor Hall said there were deeper things than opportunism that underpinned the relationship between the two giant countries. He said Russia had been one of the few powers to show sympathy to India when it emerged, weak, from British colonial rule in the mid-20th century.
Russia, he said, supplied India with cheap loans, agricultural goods and, crucially, defence gear.
Shared ‘anti-Western’ history
Professor Hall said just as importantly, Russia backed Delhi at a time when the US was helping to support – and arm – India’s great rival Pakistan “as a bulwark against Communism in South Asia”.
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