India defends Russian oil imports as EU proposes gradual ban

Crude oil price has rocketed upward since Russia launched its invasion of Ukraine on Feb. 24 (Image: Reuters)

India on May 4 defended its policy to import Russian crude, even as the European Union announced a gradual oil embargo on Moscow.

The government said international prices would further shoot up if a consumer as large as India discontinued its strategy of importing oil from "diversified sources".

"Indian energy companies have been sourcing energy supplies from Russia, on a sustained basis, over the past several years," the ministry of petroleum and natural gas said in a statement.

"If suddenly, now, as a huge importer of crude oil, India pulls back on its diversified sources, concentrating on the remaining, in an already constrained market, it will lead to further volatility and instability, jacking up international prices."

The statement comes on a day when European Commission president Ursula von der Leyen said the EU has decided to eliminate all Russian oil from Europe in a phased manner to retaliate against the Vladimir Putin-led regime for its military offensive against Ukraine.

The plan is to phase out Russian oil from the EU market within six months and eliminate refined products by the end of 2022, Von der Leyen said.

The Indian government, without making any reference to the EU's decision, said it was important to "ensure access to affordable energy for our citizens".

India's daily energy consumption requires around 5 million barrels of crude oil and a refining capacity of 250 MMTPA, the petroleum ministry said, adding the country's oil companies were servicing 60 million visitors at its petrol pumps each day.

The statement, however, clarified that energy purchases from Russia "remain miniscule in comparison to India’s total consumption".

"Our top 10 import destinations are mostly from West Asia," the government said, adding the United States also emerged as a major source of imports in the recent past, "supplying almost $13 billion worth of energy imports, with almost 7.3 percent of market share of crude oil imports".

The statement also condemned a "recent" media report, which, it alleged, tries to "sensationalise routine purchase of crude oil by Indian oil companies from Russia based on concocted source-based stories".

While the government did not specify the news report it was referring to, a Bloomberg report, earlier on May 4, said New Delhi is seeking crude supplies from Russia at less than $70 per barrel to compensate for the risk involved in trading with Moscow amid the heightened global tensions.

The country's state and private refiners have cumulatively bought 40 million barrels of Russian crude since late February when Russia launched an invasion of Ukraine, the report said, citing unnamed sources who, it claimed, were familiar with the matter.

The report is a part of a "pre-meditated attempt to further destabilise an already fragile global oil market", the government said.

Bloomberg, citing its calculations, said the total Russian oil imports to India since February is 20 percent more than the whole of 2021.

The petroleum ministry said such reports, instead of "responsibly informing debate", end up serving vested interests leading to "negative impact on the global economic recovery".