Opinion: India is using Russian oil to undercut the U.S. Congress must put a stop to it.
MarketWatchMay 06, 2023
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EU Foreign Policy Chief: Curb Russian-Origin Indian Oil
Last updated May 16, 2023
Image credit: Reuters [via Al Jazeera]Facts
- Josep Borrell, the EU's foreign policy chief, has said that while the bloc did not mind increased oil trade between Russia and India, it will curb importing Indian petroleum products that use Russian oil, including diesel.[1]
- This comes as India in the past year has become a top buyer of Russian oil following Russia's invasion of Ukraine. Access to affordable Russian oil has boosted output and earnings at Indian refineries, allowing them to export competitively to Europe and take a larger market percentage.[2]
- Borrell acknowledged that the EU's $60 per barrel price cap on Russian oil led to cheaper prices, but added that "if they use that in order to be a center where Russian oil is being refined and by-products are being sold to us? We have to act."[3]
- India exported an average of 154K barrels per day of diesel and jet fuel to Europe prior to Russia’s invasion of Ukraine, with their exports rising to 200K barrels per day after the EU banned Russian oil product imports starting from Feb. 5 of this year.[4]
- Russia’s biggest oil producer Rosneft and the Indian Oil Corporation previously signed a deal to significantly increase and diversify oil grades delivered to India.[1]
- Borrell said that any mechanism to stem the flow of Russian oil would need to be implemented by the national authorities — suggesting that the EU could target buyers of Indian refined fuels which it believes are derived from Russian crude oil.[1]
Spin
Pro-establishment narrative
Not only has India shown disregard for its allies' sanctions on Russian oil, but it has then used these low prices to turn around and profit billions of dollars by selling products to the West. By trying to help boost the Indian economy, the West has allowed New Delhi to hurt Western companies while not having to participate in the sanctions effort. It's time for India to change course and align with the norms of the global rules-based order.
Establishment-critical narrative
After allowing India to continue purchasing Russian crude oil, the EU is now afraid that its refineries are producing gas that may have been made with that same oil. The only problem is that India also buys oil from Saudi Arabia and Iraq, which would make it virtually impossible to know which products were made with which country's oil. This example shows the haphazard hypocrisies of Western energy policies.
Nerd narrative
There's a 50% chance that peak oil extraction was reached by July 2019, according to the Metaculus prediction community.
