US sanctions unlikely to impact Kremlin’s oil trade with India, says Russian minister

New Delhi: A new wave of US sanctions against the Russian oil sector is unlikely to impact the Kremlin’s oil trade with India, Russia’s First Deputy Energy Minister Pavel Sorokin said, terming the sanctions as “illegal”.

Last month, the US slapped new sanctions against Russia’s energy trade. The sanctions targeted Russian oil producers Gazprom Neft and Surgutneftegas as well as 183 vessels that have shipped Russian oil.

India, which became the second-biggest buyer of Russian crude oil since Moscow invaded Ukraine in February 2022, has taken a cautious approach, lest it run foul to US sanctions.

“Our relationship with India is based on economic pragmatism. That will continue to be the basis of our cooperation in future. We believe energy trade shouldn’t be hindered by any politics. We don’t believe sanctions are an instrument which is legitimate and we will continue to work with our partners on a bilateral and multilateral basis,” Sorokin said on the sidelines of the India Energy Week here.

Pre-Ukraine war, Russian oil made up for less than 1 per cent of India’s total oil imports but this rose to almost 40 per cent in 2022. In recent weeks, this has tapered to 30-35 per cent.

The Russian minister said Moscow will continue to work with partner countries like India to meet their energy needs. “We have all the means to supply the energy to our clients and fulfil all our contractual obligations and we are continuing doing that in a legal and economically justified way.”

Sorokin said while it is too early to assess the impact of the latest sanctions, “constructive relationships” will continue to be successful.

“You cannot judge the situation on the basis of a few weeks of data. More time is needed to assess these things, but we believe that constructive relationships will continue to be successful,” he said on oil flows from Russia to India over the past few weeks following the sanctions.

The rise in Russian share in Indian oil import was primarily because the Russian crude oil was available at a discount to other internationally traded oil due to the price cap and the European nations shunning purchases from Moscow. These discounts have, however, fallen to $2-3 per barrel from $7-8 last year.

The latest US sanctions dried up supplies of Russian oil to Indian refiners post the wind down period. Indian refiners are looking elsewhere — mainly the Middle East — to replace volumes from

Russia. India was the third-highest buyer of Russian fossil fuels in January, importing Russian fossil fuels worth euro 3.8 billion.