India is reducing its imports of Russian oil and coal, which it expanded its imports after the outbreak of the Ukraine war in February.
According to foreign media such as Reuters on the 23rd (local time), Indian oil companies have started to cut back on imports of Russian crude oil, including stopping purchases through the Siberian-Pacific Pipeline (ESPO) this month.
An Indian industry source said, “ESPO price is 5-7 dollars higher per barrel than similar crude oil in other countries such as the United Arab Emirates (UAE).”
It is said that the ‘low price merit’ of Russian crude oil has been diluted as import prices such as logistics costs have risen.
As a result, the amount of crude oil from Russia shipped to India this month was about 2 million tons, significantly lower than the 3.55 million tons imported last month. Last month, 585,000 tons of crude oil from Russia were imported through ESPO.
Instead, the Indian oil industry has increased its imports of crude oil from Africa and the Middle East.
In fact, African crude oil imports this month stood at 2.35 million tons, up from 1.16 million tons last month.
India also cut its imports of Russian coal.
According to Indian advisory firm Colmint, India’s imports of Russian coal for power generation this month are expected to be 1.4 million tons, down 30 percent from last month.
After the outbreak of the Ukrainian War, India’s imports of coal along with oil have greatly increased.
According to a source, India’s imports of Russian coal for power generation since February amounted to US$2.4 billion (about 3.3 trillion won), four times higher than the same period last year.
Experts such as traders analyze that this situation occurred due to transportation-related problems such as rising costs.
Colmint analyzed that ships from European countries, which are experiencing an energy crisis, rushed to the vicinity of the Baltic Sea, a major logistics network in northern Europe, to secure raw materials, causing congestion and difficulties in securing transportation-related insurance.
India’s decline in imports of Russian oil and coal is expected to have a significant impact on Russia’s fiscal situation.
Russia is concentrating its national capabilities on the war with Ukraine, including the recent declaration of a military mobilization order.
Meanwhile, India’s move in relation to energy imports from Russia draws attention in conjunction with the recent remarks made by Prime Minister Narendra Modi during a meeting with Russian President Vladimir Putin.
Prime Minister Modi told President Putin, “Now is not the time for war,” at the SCO summit in Uzbekistan, where the Shanghai Cooperation Organization (SCO) summit was held on the 16th.
Some observers interpret Prime Minister Modi’s remarks as a sign that India is trying to ‘distancing’ from Russia.
India is a member of the US-led Quad (a security consultative body of the United States, Japan, Australia, and India), but since the Cold War in the past, it has also had close relations with Russia in various fields such as politics, economy, and national defense.
India did not participate in sanctions against Russia even after the outbreak of the Ukraine war, but the US and other Western countries have expressed concern several times about this attitude.
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