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More Russian Oil is making backdoor entry into NATO nations via Saudi Arabia, UAE
The cat is out of the bag. India is not the only country using imported Russian oil to export processed petro-products. West Asian oil giants, led by Saudi Arabia, are buying millions of barrels of Russian diesel oil, which is banned in Europe, to sell the product to buyers in the European Union (EU). Saudi Arabia and the United Arab Emirates (UAE) are importing low priced Russian oil to jack up oil exports at higher prices to Europe. Earlier, reports suggested that India, the world’s third largest consumer and importer of crude oil, was exporting Russian oil, after refining, to countries in Europe and Asia.
These reports are only partly true as India has been exporting refined oil products for many years. India has been importing crude oil from a number of countries. Lately, India has substantially raised its crude oil imports from the US, with the country’s share in India’s crude basket hitting a record 14.3 percent in December. While Russia has become the top source of crude oil with a share of 21.2 percent in December, India reduced its dependence on Iraq (16.9 percent), UAE (6 percent) and Kuwait (4.2 percent) to accommodate more crude imports from the US. In December, crude oil imports from the US shot up 93 per cent to 3.9 million MT.
India hardly imported crude oil from Russia till 2021. Huge transportations costs made Russian crude oil very expensive compared to India’s nearby import sources from West Asia. Incidentally, India’s first greenfield private sector refinery at Jamnagar in Gujarat, put up by Reliance Industries (RIL), was granted export-oriented status as early as in April, 2007. It used imported crude oil, mostly from West Asian suppliers, to make refined products for the purpose of export. The RIL refinery has an installed capacity of 1.24 million barrels per day, making it the world’s largest refinery.
The situation changed after the Russia-Ukraine war began in February, last year. The western trade and financial embargo on Russia forced the latter to sell its oil and other products at large discounts. Oil imports suddenly became much cheaper from Russia. This made India go for Russian crude oil as the country’s energy market is 87 percent dependent on imported oil. Till 2020-21, India’s purchase of crude oil from Russia was less than one percent of its total oil imports. India bought only 419,000 tonnes of crude oil from Russia in the first 10 months of 2020-21, which was 0.2 per cent of the total import of 175.9 million tonnes. India exported refined petroleum products worth US$49 billion in 2021, making the country the world’s third largest refined petroleum exporter. The main export destinations were Singapore ($4.59 billion), the US ($3.56 billion), the Netherlands ($2.89 billion) and Australia ($2.62 billion). India’s fastest growing export markets for refined petroleum during 2020 and 2021, well before the Russia-Ukraine war, were the US, Australia and Togo
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