Nature

India’s decision to buy Russian crude has a rational explanation


Indian Oil Corporation (IOC), the country’s largest oil company, recently purchased 3 million barrels of crude oil from Russia. The purchase was made at a steep $20-25 discount on international rates, the Indian Express reported. This is Russia’s first oil purchase since the country invaded Ukraine on February 24. Taking advantage of the lower rates, India could import a total of 15 million barrels from Russia in 2022, Business Standard reported.

Since the beginning of the invasion, Russia has started to offer crude and other commodities at very favorable prices to importers like India which have not yet generally sanctioned Russian products. Speaking about the reports, White House press secretary Jen Psaki said India “should reflect on its position” on the issue of the current conflict.

The statement drew criticism from many who have criticized the West for keeping quiet about European nations still buying Russian gas and crude.

What did PSAKI say?

PSAKI, who has been holding daily press briefings since the start of the invasion, was asked by a reporter what his message would be ‘to India or any other country tempted by’ the offer of cut-price crude of Russia.

“And support for the Russian leadership is support for an invasion which obviously has a devastating impact,” she said.

How has she been criticized?

Psaki’s comments have been criticized by Indians who argue that important national decisions like securing oil should not be politicized. Many have also pointed to the hypocrisy of the White House which has yet to criticize many European countries which continue to pump Russian gas and buy Russian crude.

Russia still supplies more than 40% of Europe’s gas demand, and the Netherlands and Germany together account for more than a quarter of Russia’s oil export market. OECD countries in Europe (Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal , Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom) account for 49% of the Russian crude oil market. The rest of the share is dominated by China.

Foreign Ministry spokesman Arindam Bagchi said that “a number of countries are doing this (Russian oil importers), especially in Europe, and for now I will leave it at that.”

“Oil self-sufficient countries or those importing from Russia cannot credibly advocate restrictive trade,” Indian sources said on the matter, The Wire reported. The sources added that legitimate energy deals should not be pushed across the political spectrum.

With Russia being the world’s second-largest crude exporter, the war and ensuing sanctions have driven crude oil prices higher due to speculation of future shortages. After hitting $140 a barrel, crude fell around the $100 mark before rising to $110. The ongoing dispute is expected to only present more volatility in crude prices.

For India, which imports 85% of its crude needs, the rise in crude prices represents a huge burden on the public purse. The country also relies on Russian military hardware to counterbalance Chinese aggression in the Indo-Pacific. Pushing Russia back by taking a side in the conflict could push it further towards China, jeopardizing India’s security in the region.

PSAKI said the United States understands why some governments continue to buy Russian energy.

“Although we made the decision to ban the import of Russian oil, not all countries made that decision, and we recognize that. And they have different economic reasoning as to why different countries want it. are doing, including some in Europe,” Psaki said in another press briefing on Friday.

“But what we would project or convey to any leader in the world is that the world – the rest of the world is watching where you’re going to stand with regard to this conflict, whether it’s support for Russia in any form are illegally invading Ukraine,” she added.

Realism versus idealism

Complicated decisions made by nations like India’s decision to buy oil at a discount from a hawkish nation that is also its critical military partner highlight the growing complexity of international relations.

While India’s decision to stay neutral and buy crude at a discount is a wise strategic move, it’s not necessarily the most moral. The same goes for European countries that have not turned off their taps to Russian gas and oil. The decision to criticize “legitimate energy transactions” is not made through the prism of an economic or strategic perspective, but a moral one.

The continuation of energy transactions between India, China, Europe and Russia highlights the fact that despite advances in international law, international morality remains a tertiary factor in decision-making for nations. In the future, the world will accuse these nations of supporting the aggressor and of choosing the wrong side even if it is for the right reasons.


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