Russia expects India to keep buying oil despite US concerns

Russia expects to continue supplying oil to India despite warnings from the United States, Russian embassy officials in New Delhi said on Wednesday, adding that Moscow hopes trilateral talks will soon take place with India and China. US President Donald Trump has announced an additional tariff of 25% on Indian goods exported to the US from August 27, as a punishment for buying Russian oil, which constitutes 35% of India’s total imports compared with a negligible 0.2% before the Ukraine war.

“I want to highlight that despite the political situation, we can predict the same level of oil import (by India),” Roman Babushkin, the charge d’affaires at the Russian embassy in India, told a press briefing.

He predicted India and Russia would find ways to overcome Trump’s latest tariffs in their “national interests”.

Russian First Deputy Prime Minister Denis Manturov said separately that Russia saw scope for supplies of liquefied natural gas to India.

“We continue to ship fuel, including crude oil and oil products, thermal and coking coal. We see potential for the export of Russian LNG,” Manturov was quoted as saying by Interfax news agency.

He also said, according to RIA news agency, that Russia was counting on expanding nuclear energy cooperation with India.

Trade talks between India and the US broke down over the opening up of India’s vast farm and dairy sectors, as well as its purchases of Russian oil. The total tariff announced on Indian goods entering the US is 50%.

The Indian foreign ministry did not immediately reply to an emailed request for comment.

It has previously said the US decision to single out India for Russian purchases was “extremely unfortunate”.

Russia’s Deputy Trade Commissioner Evgeny Griva on Wednesday said buying oil from Russia is “very profitable” for India, which will not want to change its supplier.

On average Russia gives a 5%-7% discount to Indian buyers, he said, adding that Russia has a “very, very special mechanism” to continue oil supplies to India. In addition, he said Russia had started accepting Indian rupee payments for its goods after the resolution of issues that had trapped billions of dollars worth of funds in Indian banks.

As tensions between Washington and New Delhi rise, high-profile visits from New Delhi and Beijing in recent weeks have raised hopes on the part of the Asian neighbours that ties damaged by a 2020 border clash can be repaired. Indian Prime Minister Narendra Modi plans to visit China for the first time in over seven years later this month.

The planned visit was reported by Reuters last week, even as other high profile exchanges, including Chinese Foreign Minister Wang Yi’s two-day visit to New Delhi, concluded.

At the same time, Russia is trying to revive long-standing plans for a trilateral meeting with India and China to help them forge a “greater Eurasian partnership”.

“As far as the trilateral is concerned, we are quite hopeful that this format will be resumed sooner rather than later because its importance is not questioned,” Babushkin said.

“This is closely linked to the Russian initiative of the establishment of the greater Eurasian partnership,” Babushkin said.

Russian President Vladimir Putin will meet Modi in New Delhi by the end of year, he said. Putin, Modi and Chinese President Xi Jinping are also expected to all attend the Shanghai Cooperation Organisation starting August 31.

Separately, Indian refiner Nayara Energy, backed by Russia and under European Union sanctions, is relying on a dark fleet to import oil and transport refined fuels, according to shipping reports and LSEG flows.

Nayara, which controls about 8% of India’s 5.2 million barrel-per-day refining capacity, has been struggling to transport fuel since being placed under EU sanctions in July, a move that prompted shippers to back out, forcing the refiner to cut its crude runs.

India, the world’s third-largest oil importer and consumer, abides by UN sanctions and not unilateral actions, allowing refiners to import oil and ship products in vessels also under EU sanctions.

This month, Nayara has imported at least seven cargoes of Russian oil, including on sanctions-hit vessels Centurion, Mars 6, Pushpa, Horae and Devika, formerly known as Apar, according to shipping reports and LSEG data. All were carrying about 700,000 barrels of Russian flagship Urals crude, the data shows.

Nayara did not respond to an email seeking comment.

Prior to the sanctions, Nayara was selling about 70% of the refined fuels produced at its 400,000 bpd day Vadinar refinery in western Gujarat state through its local network of more than 6,600 fuel stations, and exporting the rest.

Reuters