Indian Oil Finalises Deal To Import Crude Oil From Russia

Biggest Indian oil company finalises deal to import 3-million barrels crude oil from Russia
Biggest Indian oil company finalises deal to import 3-million barrels crude oil from Russia

Indian Oil Corporation Limited has signed a deal with a Russian oil company to import 3 million barrels of crude, according to NDTV sources. 

It's a company-to-company deal, the sources added.

While Western countries have imposed sanctions, including the US' oil import embargo, on Russia in response to Moscow's attack on Ukraine, there are no restrictions on Indian oil companies for buying crude oil from Russian oil companies.

India's legitimate energy transactions should not be politicised, and countries self-sufficient in oil or those themselves importing from Russia cannot credibly advocate restrictive trading, government sources had said yesterday. 

That drew a response from the US, which said India importing discohaunted crude oil from Russia wouldn't amount to a violation of sanctions; it would imply supporting the Russian invasion of Ukraine.

Asked about a report on the possibility that India could take up the Russian offer of discounted crude oil, White House Press Secretary Jen Psaki had said earlier in the week, "I don't believe this would be violating that (sanctions)."

"But also think about where you want to stand when history books are written at this moment in time. Support for the Russian leadership is support for an invasion that obviously is having a devastating impact," Ms Psaki had added.

According to sources today, the crude oil import deal with the Russian oil company is on the best terms and conditions currently available to India in the international market. The sources added that there are no restrictions on Indian oil firms in buying crude from Russian companies.

As the US and other western nations slapped sanctions on Moscow, Russia has begun offering oil and other commodities at discounted prices to India and other large importers.

While historically India's imports from Russia have been low on high transportation costs, more Indian oil companies are likely to finalise contracts with their Russian counterparts for importing crude oil on hopes of deep discounts.

That at a time when global crude oil prices have surged to above $100 a barrel, with the benchmark Brent crude touching multi-year highs of near $140 a barrel at one point since Russia's invasion of Ukraine.

India is heavily dependent on importing crude oil for over 80 per cent of its energy needs and will continue to source it from wherever it can access on the best terms and conditions.

The deal follows a high-level contact established between India and the Russian Federation earlier this week. 

"In the last few weeks, military action has been on in Ukraine…The government will explore all options available. There are contacts (with Russia)...I myself had a conversation at an appropriate level with the Russian Federation. Discussions are currently on," Petroleum Minister Hardeep Puri said in Rajya Sabha on Monday.

"How much oil is available with Russian or new suppliers? Whenever these arrangements are worked out between our oil Companies and Russia, we will let you know. It is a dynamic, evolving situation characterised by military warfare," the minister had said.

Indian Oil Corporation, the nation's top energy firm, has already bought as much as 3 million barrels of crude oil that Russia had offered at a steep discount to prevailing international rates, sources said today.