Imports of Russian oil to India have increased sharply since Russia invaded Ukraine. It’s easy to criticize India, but still the most fossil fuels are transported from Russia to Europe, writes economic journalist Elli-Alina Hiilamo.
Russian oil is cheap now, and there are enough buyers for it despite the war.
One such is India, the world’s second most populous country. In the past, India hardly bought any oil from Russia, but after the start of the war, the situation has changed. In June up to about a fifth (you switch to another service) India’s oil imports came from Russia.
So India has taken advantage of the war situation, hoarding cheap oil and at the same time supporting Russia’s war chest. This has not been viewed favorably in the West. Already in the spring, as well as the president of the United States Joe Biden that the president of the EU Commission Ursula von der Leyen communicate to India, that oil purchases from Russia should not be increased (you will switch to another service) but to deepen its relations with the West.
It’s easy to blame India, but in the overall picture, its oil purchases clearly lag behind those of the EU countries – despite the fact that the EU has imposed sanctions on Russia targeting the energy sector.
Bank of Finland emerging advisor of the Institute of Economic Research Risto Herralan according to which India defends its increased oil purchases from Russia precisely because EU countries also continue to import fossil fuels from Russia.
– India is clearly a smaller buyer of oil from Russia than Europe. In that sense, the argument is on solid ground, says Herrala.
Fossil fuel exports are the president Vladimir Putin the main source of the war chest. All in all, the flow of fossil fuels from Russia to the world has decreased from the peak reading in March. According to the estimate, imports to the EU region have also shrunk significantly, as has Russia’s income from fossil energy.
According to Herrala, in light of June’s unofficial figures, it seems that India’s oil purchases from Russia are also on the verge of shrinking. One reason may be that Russia’s oil trade has come up with new obstacles due to the sanctions. Paying for oil has become more difficult, but trade has been made even more difficult by the restriction of insurance for ships transporting Russian oil, says Herrala.
After the war started Based on the estimate made by CREA, Russia has accumulated considerable income from energy exports. In total, the war fund has been supported with around 125 billion euros, and of this around 70 billion euros comes from EU countries.
However, significant changes will soon occur in Russian fossil energy flows. The route to Europe is closing.
The EU-decided ban on the complete import of Russian coal will come into force in August and crude oil at the end of the year. After that, the import readings will certainly be very different.
On the other hand, there are many open questions regarding natural gas. Gas deliveries from Russia to Europe have decreased and according to von der Leyen, Russia is using gas as a weapon to blackmail Europe. The European Commission proposed on Wednesday that member countries reduce natural gas consumption by 15 percent in preparation for the coming winter.
The subject can be discussed until Monday, July 25 at 11 p.m.