India’s Imports of Russian Crude Benefit the Global Economy
India’s No. 1 oil company, Oil and Natural Gas Corporation (ONGC), believes that India’s imports of Russian crude oil have a positive impact on the world economy. According to K.C. Ramesh, the executive director of ONGC, by importing from Russia, India has freed up oil from the Gulf region, allowing other countries, particularly in Europe, to source it. This arrangement is considered a win-win situation.
Since Russia’s invasion of Ukraine in 2014, India’s refiners have been taking advantage of discounted Russian oil. As a result, Russia has become India’s leading source of crude oil, accounting for approximately 40% of its imports.
World powers, including the European Union and the Group of 7, have imposed sanctions and restrictions on Russia’s oil exports due to its unprovoked war on Ukraine.
Ramesh highlights that India’s economy has greatly benefited from the discounted prices of Russian crude. He emphasizes the positive impact on India’s economic growth due to the reasonable pricing offered by Russia.
The Challenges Faced by India
India’s decision to purchase cheap Russian crude has faced criticism from the West. In May, the EU’s chief diplomat, Josep Borrell, called for stricter measures against India for reselling refined Russian oil in Europe.
Being the world’s third largest energy importer, India relies on international markets for over 80% of its crude oil. Its major sources include the Middle East and Russia.
Fereidun Fesharaki, the chairman of energy consultancy Facts Global Energy, points out that India lacks natural resources such as oil and gas. The nation has limited reserves of these vital resources.
Despite these challenges, India is actively investing in survey and exploration activities in the upstream segment of the oil and gas industry. ONGC plans to invest approximately $44 billion over the next three years to secure fuel resources for the country’s needs.
Overall, India recognizes the significance of fuel resources and is committed to investing in the oil industry to meet its energy demands.