India and China spend $24 billion on cheap Russian energy imports
Russia has pocketed $24 billion from selling energy to China and India in just three months following its invasion of Ukraine, showing how higher global prices are limiting efforts by the US and Europe to punish President Vladimir Putin. China spent $18.9 billion on Russian oil, gas and coal in the three months to the end of May, almost double the amount a year earlier, the latest customs data show. Meanwhile, India shelled out $5.1 billion in the same period, more than five times the value, as reported by Bloomberg.
China is the world’s biggest energy importer and has dedicated pipelines for Siberian oil and gas. Even as its energy consumption was curbed over the first half of 2022 — partly due to Covid lockdowns — it spent far more on Russian energy due to higher prices and small increases in volumes. Indian refiners have also been snapping up cheap Russian oil, shunned by western companies and countries since sanctions were imposed against Moscow for its invasion of Ukraine on Feb. 24, which Russia calls a “special military operation”.
A lack of new term supply deals with Rosneft may push Indian refiners to turn to the spot market for more expensive oil. It also indicates that Russia has managed to keep exporting its oil despite increasing pressure from Western sanctions to choke Moscow’s revenue. Drawn to the discounts offered, three Indian state refiners – Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum – opened negotiations with Rosneft earlier this year for six-month supply deals.
Russia has long-standing trade and strategic relationships with China and India, and along with offering steep price discounts is also accepting payments in local currency to help keep trade flows to the countries strong this year.
(with inputs from agencies)
