India dumps sanction crippled Russia, shops oil supply in M. East
India dumps sanction crippled Russia, shops oil supply in M. East
Sopuruchi Onwuka, with agency reports
One of the fastest growing economies, India, continues to take its best options to meet its energy needs amidst the global security and trade crisis affecting the oil market; shopping supply from the Middle East as western sanctions cripples Russian oil trade.
The Oracle Today reports that India had taken advantage of the rogue Russian oil exports after members of the Organization of Economic Cooperation and Development (OECD) slammed trade sanctions on the Putin regime over invasion of Ukraine.
Following the sanction, Russia had continued to export its oil under different guises but at deeply discounted rates as traders and consumers feasted on the country’s losses. India and China particularly mopped up cheap Russian oil exports which continued under rogue arrangements as traders feared sanctions from the West.
With the determination of the United States and its economic and military allies to choke out revenue flow to the Putin administration, traders dealing in underground Russian oil exports have come under increasing regulatory sanctions from the West, crippling trade transactions.
With the situation, India is now searching for new supply sources in the Middle East after key African suppliers including Nigeria and Angola are no longer able to meet orders.
“When Russian prices don’t conform, we buy from Iraq, the UAE, Saudi Arabia,” India’s oil and gas minister, Hardeep Singh Puri, is quoted as saying on Thursday as tighter enforcement of the West’s price cap on Russian crude is keeping tankers frozen in Indian ports.
Saudi oil flows to India were further boosted after Riyadh slashed prices on crude exports headed toward Asia this month, causing at least two leading Indian refineries to commit to larger imports, Reuters reported.
Meanwhile, Russian oil exports to India dropped last month to their lowest since last January, as the US pursues tighter enforcement of restrictions and the $60-per-barrel price cap. Through last month, the US Treasury has sanctioned eight cargo ships, six of which belonged to a Russian entity.
“In the Russian case, it is a question of price cap and it is also a question of some of their shipping entities coming under adverse notice of others,” Puri said. The situation has resulted in a number of Russian tankers sitting idly off Indian shores, with some vessels never reaching their destination.
Alongside the sanctions, Puri has said that the Russian discounts are losing their appeal, dismissing speculation that payment issues were behind the falling trade between the two countries.
“India’s leadership has only one requirement: that the Indian consumer gets the energy at the most economical price, without disruption,” he said earlier this month.
The Oracle Today reports that the U.S. Treasury on Thursday said it imposed sanctions on a United Arab Emirates-based Hennesea Shipping Company Limited for violating the $60-per-barrel price cap on Russian crude oil exports in its first such enforcement action this year.
The action effectively blocks Hennesea Holdings from dollar-based transactions, placing the firm on the Specially Designated Nationals list.
The Treasury said in a statement that the Office of Foreign Assets Control designation sanctions were imposed on 18 mostly older tankers acquired in late 2022.
The Treasury said it previously identified one of the vessels, the HS Atlantica, as having transported Russian-origin crude oil priced above the $60 cap while using a U.S.-based provider of maritime services.
The G7-led price cap on Russian crude oil, imposed in December 2022, aims to reduce Russia’s revenues available for its war in Ukraine by allowing Western-supplied insurance and other services only on cargoes priced below $60 a barrel.
