NEW DELHI: India’s oil imports from Russia, which jumped 11 times in 2022-23 amid worsening geo-political tensions, are set to hit record highs with Indian Oil Corporation inking a pact with Russia’s largest oil producer Rosneft to ‘substantially’ ramp up oil supplies. Russia will also diversify the grades of crude oil it supplies to India.
The deal assumes significance as it comes at a time when India is increasingly facing diplomatic pressure from Western countries to curtail imports of ‘cheaper crude’ from Russia.
India, the third largest oil importer in the world, has been ignoring such calls citing its domestic energy needs, and has increased Russian imports considerably in the past year.
On Wednesday, Rosneft CEO Igor Sechin and IOC chairman Shrikant Madhav Vaidya signed the agreement in the presence of petroleum minister Hardeep S Puri.
The agreement, however, did not indicate volumes.
The two companies also discussed ways of expanding cooperation between Rosneft and Indian companies in the entire value chain of the energy sector, including possibilities of making payments in national currencies.
According to energy cargo tracker Vortexa, India imported 35 per cent of its total crude from Russia in February 2023, which is 1.62 million barrels per day. India’s other top four traditional oil suppliers are Iraq, Saudi Arabia, UAE and the US (see chart).
According to the commerce ministry, Russia has for the first time become one of the five largest trading partners of India, thanks to ballooning crude oil imports. The volume of trade between the countries in 2022 reached $38.4 billion. “Thus, the goal set by the leaders of our countries to increase turnover to $30 billion by 2025 has been achieved in advance,” said the head of Rosneft.