The United States does not intend to sanction India over its continued purchase of Russian oil, senior American officials have said, calling New Delhi one of their most “consequential” partners.
Ahead of a week-long visit to India by U.S. Assistant Secretary for Energy Resources Geoffrey Pyatt, where the response to the war in Ukraine will be on the agenda, the officials said that India’s purchase of Russian Ural crude oil was at rates below the “price cap” of $60 set by G-7 countries in December, and that assisted the U.S.’ twin goals of ensuring that enough oil in the market, but not giving Russia a premium price for its exports.
“Even though India is not a participant in the price cap coalition, India has effectively used its negotiating leverage, which it derives from the price cap and the fact that large portions of the global markets are no longer accessible to Russia, to drive down the price that it pays for Russian crude,” Mr. Pyatt said, in response to a question from The Hindu, on the efficacy of Western sanctions and the oil price cap.
Rising Russian oil imports
Mr. Pyatt, who was part of a briefing call with Indian journalists about his visit to India next week, said that he would travel to Mumbai, Pune and Delhi to advance the strategic energy relationship and discuss plans for energy transition to renewables. He added that while India and the U.S. “do not always share the same policy approaches” with regards to Russia and Ukraine, the two countries share a commitment to “upholding the international rules-based order that is founded on respect for territorial integrity and sovereignty”.
Despite several calls to reduce oil purchases from Russia, the Indian government has repeatedly asserted that it will buy oil from “wherever” it needs to. According to the latest figures for January, India has imported around 1.27 million barrels per day (bpd) of Russian Ural oil, a 30-fold jump from last January when it was around 40,000 bpd. Russia, which was earlier the 17th biggest oil supplier to India, has become the highest exporter for the last few months. It now accounts for about 28% of India’s oil imports, up from just 0.2% before the Russian invasion of Ukraine.
When asked, the American officials rejected the calls by senior Ukrainian lawmaker and the head of its Foreign Relations Committee Oleksandr Merezhko for secondary sanctions against countries like China and India that are “financing the Russian economy and the Russian military machine”. During a visit to Washington, Mr. Merezhko called the Indian stance “painful”.
“I want to be clear we are not looking to sanction India, and our partnership with India is one of our most consequential relationships,” replied Karen Donfried, U.S. Assistant Secretary for European and Eurasian Affairs.
‘Comfortable with India’s stance’
In March last year, the U.S. had called India’s stand on Russia, including its refusal to criticise Russia’s actions in Ukraine, as “deeply disappointing”. However, the U.S. officials briefing the media made it clear that Washington is now “comfortable with the approach that India has taken”, given Russian budget deficits over the sale of Ural crude to India at about $56 per barrel, which is more than $30 lower than the transatlantic pool of Brent crude and other world oil markets.
“All of which means that Vladimir Putin, because of his invasion of Ukraine and because of his invasion of – his weaponization of energy, has lost what has traditionally been Russia’s most valued and valuable market for its oil and gas resources.,” Mr. Pyatt said.