Indian refiners may have saved at least $10.5 billion by acquiring Russian oil at reduced costs following the commencement of the Ukraine war in February 2022. Russia began supplying its crude at lower prices after Western nations cut their oil imports from Moscow to put pressure on the Russian economy and halt its offensive in Ukraine.
The development has elevated oil to one of the most important commodities in India-Russia economic relations, with Moscow emerging as New Delhi’s primary oil supplier.
In fiscal year 2023-24, India’s oil imports totaled $139.86 billion. If domestic refiners had paid the same price per barrel for Russian crude as they did for petroleum from all other suppliers combined, the total would have risen to $145.29 billion.
The West has criticised India’s purchase of oil from Russia. India’s purchase of oil from Russia exceeds the West-imposed cap. On this, the US recently stated that it has not pressed India to reduce oil purchases. Buyers can negotiate higher discounts on Russian oil outside of the price restriction, as long as they do not employ Western services like as insurance and broking.