India Sees Renewables Boom Amid Global Energy Crisis
Rising clean energy investments and an expanding offshore wind sector are pointing toward a new renewable energy boom in India, as the falling cost of clean technologies paired with the global energy crisis siphons investment away from fossil fuels. “The Russia-Ukraine war has driven up the prices of imported coal and gas and is adding strain to the dispatchability of high-cost power,” writes energy economist Vibhuti Garg for the Institute for Energy Economics and Financial Analysis (IEEFA). “Renewable energy combined with energy storage systems such as battery storage and pumped hydro have become a cheaper source of electricity to meet electricity demand round the clock.” That shift “will actually hasten the energy transition,” India’s Power and Renewable Energy Minister Raj Kumar Singh told Bloomberg Green. “Once you have round-the-clock renewables, that’s renewables plus storage, that are viable, then that’s the end of the story for fossil fuels.” A report released by Garg in June showed a record US$14.5 billion in renewable energy investment in India for the 2021-22 fiscal year—a rise of 125% from the year before, and a 72% increase from pre-pandemic levels. Acquisitions accounted for 42% of total investments, and most of the other big deals were packaged as bonds, debt, joint ventures, equity investment, and mezzanine funding—a hybrid of debt and equity financing. General renewable energy accounted for 54% of the investments and solar comprised 42%. The remaining money was directed to rooftop solar (2%), green energy finance (1%), and wind (1%). Garg expects renewables to maintain their current growth trend in India, but she says government action is necessary to decarbonize “hard-to-abate sectors” like fertilizer production and petroleum refining, where green hydrogen consumption could be accelerated. The government could also hasten growth in key areas like energy storage by setting time-based targets. Garg adds that India’s ministry of renewable energy has revived its 2015 offshore wind power goals with a roadmap to install 30 gigawatts by 2030. “With offshore project costs falling globally, it’s the right time for this move,” she writes. Globally, offshore wind is emerging as a new and viable clean energy solution. China alone installed 16.9 gigawatts of new capacity in 2021, amounting to 30% of the global total. So far, the high cost of offshore wind compared to onshore wind and solar has held back progress in India, says the Financial Express. But offshore turbines will play an important part in decarbonizing India’s power sector, managing peak demand, and adding resource diversification benefits. As offshore wind emerges as a viable energy source worldwide, successful development of other renewable energy projects in India would give investors confidence to invest more to expand the sector. Rising investment in offshore wind would, in turn, help the country sustainably address its rising electricity demand. “Even with higher tariffs today, offshore wind power provides energy security against shocks from the price volatility of fossil fuels,” the Financial Express writes.
China May See An Unprecedented Drop In LNG Imports Next Year
China became the world’s largest importer of liquefied natural gas last year. But in a completely different energy market this year, China will likely cede the title to Japan, as Chinese imports of LNG are set for the largest-ever annual plunge since China started importing the super-chilled fuel in 2006. Weakening gas demand in China, increased domestic production of natural gas, policies to support coal as the “energy security” tool, and of course, the much higher spot LNG prices this year, have all combined to reduce Chinese purchases of LNG so far in 2022, consultants Wood Mackenzie said in an analysis this week. Wood Mackenzie expects China’s LNG imports to drop to 69 million tons (Mt) this year, which would be an unprecedented 14% annual decline—the steepest drop since China first imported LNG back in 2006. According to WoodMac, China’s gas demand fell by 5 percent year over year in the second quarter due to high gas import prices, economic slowdown with COVID-related lockdowns, warmer winter than usual, and support for ‘cleaner’ coal as Chinese authorities have been prioritizing energy security since the power outages last autumn. So far this year, China has stayed away from costly spot LNG cargoes as prices soared with the energy crisis last autumn and the Russian invasion of Ukraine, which sent Europe racing to buy LNG to replace as much Russian pipeline gas as soon as possible. The altered energy markets have upended Chinese LNG import policies, too. In 2021, China was the biggest buyer of LNG in the world, and the United States was the largest supplier of spot LNG volumes to China, the EIA said earlier this year. From February to April 2022, Chinese imports of LNG from the U.S. plunged by 95% compared to the same period in 2021. So far this year, the United States has sent the occasional LNG cargo to China, but most American exports have headed to Europe, which is paying more for spot LNG supply. Europe is pricing out Asia for spot deliveries and is turning to LNG, mostly from America, to cut its still heavy dependence on Russian gas. At the same time, China is buying more LNG from Russia, which the West doesn’t want to touch. High spot LNG prices and lackluster demand due to China’s zero-COVID lockdowns have significantly reduced Chinese appetite for spot U.S. LNG this year. Chinese firms have signed several long-term agreements for U.S. LNG, joining the trend of buyers returning to long-term deals to avoid costly spot LNG supply in a market where Europe is scrambling to secure volumes to avoid a winter of rationing and industry collapse. “Chinese buyers have minimised their exposure to costly spot LNG. Spot purchases were muted, and reportedly, some Chinese players resold cargoes into the European market,” Wood Mackenzie research director Miaoru Huang said. High spot prices and weaker demand from the power sector as coal is being prioritized are set to lead to the biggest Chinese LNG import decline on record. “In 2015 China’s LNG imports declined for the first time but by 1% only. Japan will move back to becoming the world’s largest LNG importer this year,” Huang said. Unwavering support for coal is also denting Chinese gas demand, the WoodMac analysts say. “China is unlikely to change its coal policy as the backstop of energy security in the near future. National policy is unlikely to encourage gas demand in a significant manner due to concerns over supply chain pressure and affordability,” Huang noted. China has been putting more emphasis on energy security since the autumn of 2021. Earlier this year, just after the Russian invasion of Ukraine, China said it would continue to maximize the use of coal in the coming years as it caters to its energy security, despite pledges to contribute to global efforts to reduce emissions.
NTPC And Indian Oil Sign Agreement For Powering IndianOil Refineries With Renewable Energy
NTPC and IndianOil signed an agreement for the formation of a joint venture company for meeting the power requirements of upcoming projects of IndianOil refineries on July 18, 2022, at New Delhi. Unified in the purpose of increasing the usage & capacity of renewable energy sources in the country, the state-run corporations teamed up setting-up renewable energy-based power plants for IndianOil Refineries. Shri. Gurdeep Singh, CMD, NTPC said, “The joint venture between the two energy majors for a common purpose is a classic example of teamwork and collaboration for others to follow”, Shri. Shrikant Madhav Vaidya, Chairman, IndianOil, said that “It is indeed a powerful statement, as two fossil fuel giants of the country – IndianOil & NTPC join hands for changing their path towards green energy”. He further added that “the two Maharatna PSUs can now leverage their capabilities to push forward the green growth agenda”. Going forward NTPC Green Energy Limited (NGEL), a wholly owned subsidiary of NTPC, will form the JV Company for supply of RE-RTC power to IndianOil. NGEL will be an umbrella company for consolidating NTPC’s total renewable energy businesses. IndianOil plans to meet the additional power requirement of its refineries using round-the-clock renewable energy to the tune of 650MW by Dec 2024 through this JV.
Explained: Why India has cut windfall tax on diesel, aviation fuel exports
With crude oil prices easing amid fears of a global recession, the Indian government has cut the recently imposed cesses and levies on diesel and aviation turbine fuel (ATF) and removed the cess on exports of petrol, effective Wednesday. What are the duty cuts? Additional excise duties equal to Rs 6 per litre on exports of petrol have been removed, while that on diesel exports has been cut to Rs 11 per litre from Rs 13 per litre earlier. Also, the cess by way of special additional excise duty (or windfall tax) on domestic crude being sold to domestic refineries at international parity prices has been cut to Rs 17,000 per tonne from Rs 23,250 per tonne, while the export duty on ATF has been lowered by Rs 2 to Rs 4 per litre. The government has also exempted petrol, diesel and ATF from levy of duties when exported from refinery units located in Special Economic Zones. What was the reason for the extra levies? With an aim to address the issue of fuel shortage in the country, the government had on July 1 imposed special additional excise duty on export of petrol and diesel. Cesses equal to Rs 6 per litre on petrol and Rs 13 per litre on diesel were imposed on their exports. The government also imposed a cess of Rs 23,250 per tonne (by way of special additional excise duty) or windfall tax on domestic crude being sold to domestic refineries at international parity prices. Earlier, Revenue Secretary Tarun Bajaj had said the increase in the duty will also be applicable to SEZs, but the export restriction will not be applicable. The Finance Ministry did not give a timeline for continuation of the levy but had said it will assess the situation every 15 days to review the impact of these duty changes. Starting June, fuel pumps across the country have been reporting fuel shortage, leading to their closure. The situation of fuel shortage at pumps peaked during the middle of June, resulting in the government issuing a statement on the matter. The statement assured of enough fuel available in the country and asked oil marketing companies to ensure their fuel pumps remain open. Global prices Global crude prices had risen and domestic crude producers were making windfall gains. Private oil marketing companies were exporting petrol and diesel to foreign countries like Australia for better realisation. The shortage of fuel at retail outlets was because oil marketing companies were not willing to sell the commodity at a loss since prices had not increased despite rising crude and depreciating rupee – these two factors had led to oil marketing companies losing Rs 20-25 per litre on diesel and Rs 10-15 per litre on petrol.
Germany’s Top Buyer Of Russian Gas On The Brink Of Insolvency
Germany’s Uniper SE is just “days” away from insolvency, deputy chairman of Uniper’s supervisory board, Harold Seegatz, told Bloomberg on Friday. Uniper is Germany’s largest purchaser of Russian natural gas, securing contracts with Gazprom. But as Gazprom cut flows of natural gas to Germany and Russia’s Nord Stream 1 pipeline undergoes maintenance, Uniper’s purchases of gas on the spot market have increased—a costlier scenario than its arrangement with Gazprom. The high costs are creating an untenable situation for Uniper, and it is taken to withdrawing gas from storage—gas that was destined to help Germany make it through the coming winter as the country tries to wean itself off of Russian natural gas. Withdrawing gas from storage helps Uniper save on natural gas purchases, but this is merely a game of kicking the can into an inevitable insolvency oblivion. “We are currently reducing our own gas volumes in our storage facilities in order to supply our customers with gas and to secure Uniper’s liquidity,” Uniper said, adding that it was clear “that Uniper cannot wait weeks, but needs help in a few days.” Uniper is already negotiating with the German government a possible bailout that could give Germany a stake in the utility. Uniper’s CEO Klaus-Dieter Maubach warned last Friday that the utility was unable to continue to refill storage ahead of winter, and could ultimately be forced to raise prices and even reduce supply. Germany has a plan to fill its gas storage by 90% ahead of the winter season, with a deadline to achieve this set for November. But early withdrawals during summer—a relatively tame demand season for natural gas—this plan is now in serious jeopardy, and Germany could stare down winter heating season with precious little inventory.
The West has yet to find a way to block Russian oil exports
As the war in Ukraine grinds on, Europe and the United States continue to search for tools to do the impossible: cut Russian President Vladimir Putin’s energy earnings without disrupting oil and gas supplies or driving prices through the roof. The latest option is a cap on the price of purchased Russian oil. But a better and more feasible plan languishes without sufficient advocacy. On May 31, the European Union reached an agreement to ban most Russian crude and refined petroleum imports by the end of 2022. Shipments by sea, which account for about two-thirds of Europe’s purchases from its eastern neighbour, will be forbidden. Poland and Germany also agreed to end pipeline imports. If both measures are implemented, the only Russian oil supplied to the EU will come via the southern Druzhba pipeline, which fuels Slovakia, the Czech Republic and pro-Kremlin Hungary. Last year, 56 percent of Russian crude and 70 percent of its refined product exports went to Western countries, mostly European nations such as Germany, the Netherlands and Poland. The US, Canada, Britain and Australia meanwhile, which buy little Russian oil, had already announced measures to halt Russian oil imports. With Western buyers closing their wallets, Russia has reoriented sales to Asia, particularly India, which was not previously a major customer and to some extent China. To sweeten these deals, Russia offers discounts of up to $30 per barrel, but prices have risen so much (they have been over $100 a barrel since March) that Moscow is earning at least as much as immediately before the war and 50 percent more than in the first four months of last year. For now, Russia’s new markets seem secure. If the West were to try to block these sales to Asia, for instance, via a shipping ban, it would anger important allies like New Delhi, invite avoidance (as has occurred for several years with sanctions on Iran and Venezuela) and, to the extent it was successful, drive world oil prices even higher than they already are. This could trigger a global recession, imperil the electoral fortunes of US President Joe Biden and several European leaders and create political pressure to concede to Russia. Aware of these constraints, Western allies, including Japan, have sought more nuanced instruments. At the G7 summit in Germany last month, leaders agreed to consider a cap on Russian oil imports sold above a certain price. This could be enforced by banning shipping or insurance for cargoes purchased above the limit. Figures discussed for the cap are in the range of $40 to $60 per barrel. But there are numerous problems with this approach. First, it would require the EU to revisit its own ban passed in May, laboriously crafted after long debate with Budapest. Second, the proposed price is too high, well above the likely production cost for Russian companies of $20 per barrel. The Russian state heavily taxes its companies at prices above $25 per barrel. Price caps on refined products would have to be set, too, inviting creative re-labelling. Third, insurers from China and India would likely step in. While Asian insurance providers do not have the same reputation nor coverage levels as European firms, they would still be adequate for sales to those destinations. Fourth, as with the “Oil-for-Food” programme in Iraq in the 1990s, the cap would invite under-the-table deals and kickbacks. Barring that, Russia would simply play divide-and-rule by selling above the cap to its geopolitical supporters. Finally, Russia may still cut back on oil shipments, as it has already done with gas to Europe and by invoking spurious technical reasons to limit Kazakh oil exports via its territory. Former President Dmitry Medvedev even threatened Japan that its adherence to a cap would see its access to Russian oil cut off and prices going above $300-$400 per barrel. More effective solutions have been advanced by Ricardo Hausmann, a Harvard economist and former minister of planning in Venezuela, Harvard Russian scholar Craig Kennedy and US Treasury Secretary Janet Yellen, among others. The best of these is a stiff per-volume tariff on imports of Russian petroleum. This would weaken the incentive for buyers to cheat as they would still face the end-user market price. China, India and other countries could be brought in by a combination of the stick of shipping sanctions and the carrot of retaining much of Russian oil earnings themselves. This would create a kind of buyer cartel. But such concepts have achieved oddly little traction despite their economic merits. Whatever mechanism is arrived at, the impact on rival oil producers will be profound. Currently, Moscow cooperates with OPEC and other leading producers in the OPEC+ alliance. Saudi Arabia is keen to retain Russia within this framework, even though it cannot currently live up to its production targets. An outright Western ban on Russian oil would drive up prices, thus benefiting Russia’s petroleum rivals. It would also lead to intense struggles for market share in the Middle East’s traditional Asian markets, even though Middle East producers would reorient to sell more to Europe. India, China and others would have tough choices on whether to buy as much as half their oil from Russia at attractive discounts but with major logistical and legal problems and at the penalty of dropping their long-standing and reliable Gulf suppliers. A price cap or tariff would be less disruptive, so long as Russia did not retaliate, but would still invite trading shenanigans. Russian oil output is also likely to decline in the longer term, weakening Moscow’s hand as a competitor to Gulf producers, and suggesting Gulf countries should step up expansion of their own capacity. As Western efforts to square the stubborn circle of oil prices continue, Middle East oil exporters will watch keenly from the sidelines.
Will the world face the seventies oil shock once more?
The International Energy Agency Executive Director Fatih Birol has said that the “worst of the energy crisis” is yet to come. In fact, he said it may be much bigger than the oil shock of the seventies. “Back then it was just about oil. Now we have an oil crisis, a gas crisis and an electricity crisis simultaneously,” he said in an interview given to Der Spiegel. In the seventies, two oil crises remade the world after countries faced severe fuel shortages, high inflation and violent civil protests. But the International Monetary Fund put out a view different to Birol’s. The IMF said that this oil crisis will not be as bad. A blog by its senior economist Nico Valcxx said that “lower oil reliance insulates the world from 1970s-style crude shock”. So, will it be seventies once more or are economies more resilient now? Deepak Mahurkar, leader-oil and gas industry practice at PwC India, does not see a repeat of the decade happening. “Then, there was no alternative to oil. Therefore, the kind of impact it (oil crisis) had in the seventies–with economies getting impacted and oil consumption going down, and so on–will not happen. Economies could continue to do not so badly but, if the situation persists for a longer period, then there is a definite possibility of oil consumption going down.” The steady climb in oil prices could be pegged to a “very unusual” situation today. Mahurkar said, “It is very unusual because all the commodity prices have gone up, therefore the impact of inflation on all economies is being felt severely. There is no alternative that people can switch to.” He sees prices for oil, gas and coal to remain firm for some time. Prashant Vasisht, vice president and co-group head at corporate ratings in ICRA, said that it is hard to predict if things will go as badly as they were in the seventies but added that they see crude price averaging somewhere between $100 and $120 in FY23 with an upward bias. “A lot will depend on whether the Russia gas (pipeline) will reopen because European and north Asian countries are heading towards winter,” he added. In the first half of the decade, the Arab nations stopped oil supplies to the US and its allies, accusing them of supporting Israel during the Yom Kippur War, and also raised the price per barrel from $3 to nearly $12. This led to acute shortage in the western countries, the US rationed supplies and people were lining up at fuel pumps. In the US, inflation was already running high, with policies that tried to tame unemployment by increasing the supply of money, and the oil crisis made it worse. In the late seventies, a revolution broke out in Iran, which further squeezed oil supply and forced countries to invest in alternate sources of energy. India thought that it would be protected from the oil crunch and resultant price rise, but it didn’t play out that way. In the first oil crisis, the OPEC countries raised the rates for everyone and India’s oil bill came to nearly half of its export earnings and twice its forex reserves. Food production plummeted with fertiliser shortage, and worsened a food shortage that came with the 1971 war with Pakistan. India was just recovering from a balance of payments (BOP) crisis when the second oil crisis from the instability in Iran hit. “The BOP situation changed dramatically in 1979– 1980 as agricultural growth suffered and industrial bottlenecks emerged owing to shortages of power, coal, cement and a deterioration of labour relations, difficulties with ports and railway transportation. Infrastructure inadequacies bedevilled the economy, and these were accentuated by a poor monsoon which affected hydel generation,” V Srinivas in his book India’s relations with the International Monetary Fund. Srinivas, who was Additional Secretary to GoI, worked as Advisor to the Executive Director of IMF. In the second half of seventies, inflation in India shot up from 3 per cent in 1978-79 to 22% in 1979-80. According to a speech given by former RBI governor YV Reddy, average inflation rate during the seventies was at 9%. “The external terms of trade worsened significantly owing to higher prices for imported petroleum and fertilisers,” Srinivas wrote. Why does the IMF think it won’t be that bad? The senior economist at IMF, Nico Valckx discusses a metric called oil intensity, which captures how many barrels are needed to produce $1 million in gross domestic product. He wrote, “this measure (oil intensity) was about 3.5 times higher than current levels when crude prices almost tripled between August 1973 and January 1974.” So any change in oil prices won’t be as disruptive as it was in the seventies. Besides this, wages today don’t automatically adjust to inflation–for example, your parents’ salary slip may have had a component called Dearness Allowance (DA) which yours may not–and central banks function differently. “More (central banks) are independent today, and the credibility of monetary policy has broadly strengthened over the intervening decades,” he wrote. The oil intensity measure is a good measure for oil demand, in fact it is the most reliable measure we have for predictions, said PwC’s Mahurkar. But, he added, there is a shift that is taking place in oil use. “Dual-fuel capabilities are being built into automobiles and, more importantly, in industries. Therefore, people are swiftly changing from one fuel to another and not for environmental reasons but for economic reasons,” he said. ICRA’s Vasisht believes that the drop in oil intensity does not really capture the oil demand scenario. “When you are selling more software than big machinery, then oil intensity would go down. But oil is still the primary source of energy. With American households spending around $1,000 per month on gasoline, which is a huge amount, oil prices are a big political issue. So the fall in oil intensity does not capture the reliance the world still has on the fuel,” he said. He also does
India, White House start discussion on Russia gas cap implementation
The adoption of a Russia gas cap has reportedly been the subject of conversations with various nations, including India, according to White House national security adviser Jake Sullivan. “We have begun talks with India about how a price cap would work and what the implications would be,” he said. US President Joe Biden informed Indian Prime Minister Narendra Modi in April that increasing India’s energy imports from Russia was not in India’s best interests. According to White House press secretary Jen Psaki, during a virtual conference with PM Modi, Biden made it plain that increasing India’s energy imports from Russia was not in the country’s best interests. Psaki characterised the meeting as helpful and fruitful rather than “adversarial.” She opted not to say whether Biden requested any particular guarantees from India regarding energy imports. Price Cap on Russian Oil: Is it practical? Negotiators, especially those from the US and Italy, are trying to establish a system that limits the flow of finance to Russia while maintaining oil supply for key users like China and India in order to prevent additional price volatility. The discussion is not expected to cover the mechanics of a price cap’s implementation or the amount at which it would be imposed, though. A senior Biden administration insider claims that decision-makers would instead direct the finance ministers to concentrate on working out the kinks in the next weeks and months. The alternative will be mentioned as an idea in the final communique because a political decision to explore it has been made, said a G7 official. By placing restrictions on insurance and other services necessary for the delivery of Russian oil, the US has suggested that the cap might be successful. However, the oil market has serious doubts about how something like this may work.
After 5 months, ONGC finally gets a director on Hindustan Petroleum board
After over five months, Oil and Natural Gas Corporation (ONGC) has finally got a director appointed on the board of Hindustan Petroleum Corporation Ltd — a firm it had acquired for Rs 369.15 billion. The Ministry of Petroleum and Natural Gas on June 22, conveyed its consent for the appointment of Pankaj Kumar, Director (Offshore), ONGC as a director on the board of HPCL, according to regulatory filings by HPCL. For over five months, ONGC had no representative on the board of HPCL — a company in which it owns a 51.11 per cent stake since January 2018. HPCL for over one-and-a-half years — between January 2018 and August 2019 — did not recognise ONGC as its promoter despite the government selling its entire 51.11 per cent stake in the company to the oil explorer. It relented only after a rap from market regulator SEBI. ONGC got the right to appoint one director who HPCL called ‘Government Nominee Director (Representative of ONGC)’. “Pankaj Kumar has been appointed as Government Director on the Board of the company effective June 22, 2022,” HPCL said in the filing. Officials said ONGC has been nominating one of its directors as the nominee director. Prior to the latest appointment, its last nominee director was Alka Mittal, Director (HR) who was appointed to the HPCL board in April 2021. In January this year, Mittal was given additional charge of chairman and managing director of ONGC after the retirement of the incumbent. And following the past practice of the company that the chairman could only sit on the board of a subsidiary in the capacity as chairman and not as a director, Mittal resigned from the board of HPCL and Kumar was nominated. HPCL promptly took note of it. In a filing on January 6, 2022, HPCL said: “Alka Mittal has tendered resignation from the position of the Government Nominee Director (Representative of ONGC) of the company effective January 05, 2022.” Officials said as per rules, Mittal also sent her resignation from the HPCL board to the Union Ministry of Petroleum and Natural Gas — the parent ministry of ONGC and HPCL. The ministry, however, rejected the resignation and asked Mittal to continue on the HPCL board for “strategic reasons”, they said. ONGC thereafter approached HPCL for reinstatement but the company said it wanted written instructions from the ministry as it had already accepted Mittal’s resignation and changed its books, officials said, adding while the firms went into letter writing, HPCL’s annual accounts for fiscal 2021-22, were approved without a nominee of its principal promoter. But now the ministry seems to have had a change of heart and approved the original recommendation of ONGC, i.e. appointment of Kumar as the firm’s representative on the HPCL board. It is not clear why the ministry changed its stance. In the initial months of the Rs 369.15 billion buyout, HPCL had refused to recognise ONGC as its promoter. It had ignored directives from the government as well as the Securities and Exchange Board of India (SEBI), forcing the latter to set a deadline of August 13, 2019, and warn of “appropriate action” if it failed. This forced the HPCL management to make amends. Before the SEBI order, HPCL listed ONGC as a public shareholder in its regulatory filings. The President of India was listed under the promoter/promoter group category with nil shares. In September 2018, SEBI first advised HPCL to re-file the shareholding pattern to the stock exchanges revising the status of ONGC as ‘promoter’. In June 2019, the ministry directed HPCL to indicate ‘President of India’ as the promoter of HPCL and ONGC also to be added as a promoter below ‘President of India’. These were ignored on the pretext that the company needed clarifications from multiple agencies, officials said. In an August 6, 2019 letter, SEBI again advised HPCL to re-file the shareholding pattern to the stock exchanges for all quarters since the acquisition of shares by ONGC, while revising the status of ONGC as a ‘promoter’, by August 13, 2019,failing which appropriate action will be initiated as per SEBI Act.
Russian oil supplies to China and India are growing noticeably, says Vladimir Putin
The ongoing Russian invasion of Ukraine has prompted the United States and other western countries to impose hard sanctions of Russia and the European Union (EU) has also been trying to decrease oil and gas imports from the country. However, India and China have been importing oil supplies from Russia even now and President Vladimir Putin said at the BRICS Business Summit that trade with both nations has strengthened lately. According to AFP, Putin said that Russia’s trade with Brazil, India, China and South Africa rose 38% in the first three months of the year to $45 billion. “Russian oil supplies to China and India are growing noticeably,” Putin said in a video address. “Russian oil deliveries to China and India are increasing. Agricultural cooperation is developing dynamically, as is the export of Russian fertiliser to BRICS countries”, he added according to AFP. Putin also called upon the BRICS nations to strengthen their ties amid the global economic crisis. “Businessmen of our countries are forced to develop their business under difficult conditions where Western partners neglect the basic principles of market economy, free trade, as well as the inviolability of private property,” Putin said at the BRICS Business Summit on Wednesday. The sanctions enforced by the US and EU have affected the Russian economy to a certain extent and Putin were quick to criticise “the permanent implementation of new politically motivated sanctions” by the US and other western countries that contradict “common sense and basic economic logic”. Putin concluded his speech by saying that Russia is looking at “alternative international transfer mechanisms” with BRICS nations in order to reduce their dependence on Dollar and Euro.