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No ‘Red Line’ for India’s Oil Imports from Russia

by Carl Steward
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Oil Markets in 2022No ‘Red Line’ for India’s Oil Imports from Russia

On Thursday, a top US official said during a visit to New Delhi that the US will not set any “red lines” for India on its energy imports from Russia; however, it does not want to see a “rapid acceleration” in purchases.

India has purchased at least 13 million barrels of Russian crude oil since the country invaded Ukraine in late February, enticed by substantial discounts following Western sanctions on Russian firms. According to figures collated by Reuters, this compares to around 16 million barrels for the entire previous year. “Friends don’t draw red lines,” Daleep Singh, the United States’ Deputy National Security Adviser for International Economics, told reporters; he added that the US had urged its European and Asian allies to reduce their reliance on “an unstable energy supply.”

Singh made the remarks ahead of Russian Foreign Minister Sergei Lavrov’s two-day visit to India’s capital.

There have been increased purchases from the United States in the last decade; Russia has long been India’s largest supplier of defense equipment. Russian supplies, according to defense analysts, are more cost-competitive and crucial for India as it fights a superior Chinese force.

Singh stated that the US was willing to assist India in diversifying its energy and defense supply. Russia is a friendly country to both India and China, and none has denounced Russia’s invasion of Ukraine. While India has abstained from voting on UN resolutions on the conflict, China has sided with Moscow on several occasions.

Following a meeting with Lavrov on Wednesday, China’s Foreign Minister Wang Yi stated that Moscow and Beijing were “more committed” to deepening bilateral ties and collaboration. They also enounced Western sanctions against Russia.

Oil Prices Have Rallied to A Near All-Time High

The US is mulling the largest-ever draw from its emergency oil stockpile; oil producer group OPEC+ resolved on Thursday to continue its strategy of progressively reopening the taps.

From May 1, the vital energy alliance of OPEC and non-OPEC partners agreed to increase output objectives by 432,000 barrels per day.

There’s continuous pressure from significant consumers pushing the organization to pump more to temper skyrocketing oil prices and boost the economic recovery; hence, energy analysts expected OPEC+ to approve another modest monthly increase. Mohammad Barkindo, the Secretary-General of OPEC, urged members, including Russia, to “keep the course” and “Be vigilant and attentive to ever-changing market conditions.”

OPEC+ is currently unwinding a 10-million-barrel-per-day production cut that set a new record. The historic production cut was implemented in April 2020; it should aid in the recovery of the energy market after the coronavirus epidemic slashed oil consumption.

Since August of last year, the producer alliance has increased monthly output targets by 400,000 barrels per day. From next month, this will climb to 432,000 barrels per day.

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