Russia sees no danger for its oil exports from the trade deal that the U.S. president sealed with his Indian counterpart earlier this week. Per the deal, Washington will cut tariffs on Indian goods, and New Delhi will commit to expanding purchases of U.S. oil and gas.
“We, along with all other international energy experts, are well aware that Russia is not the only supplier of oil and petroleum products to India. India has always purchased these products from other countries. Therefore, we see nothing new here,” Dmitry Peskov, Kremlin spokesman, told the media, as quoted by The Hindu earlier today.
“The American shale oil they export is light grades, similar to gas condensate. Russia, on the other hand, supplies relatively heavy, sulfur-rich Urals. This means India will need to blend U.S. crude with other grades, which incurs additional costs, meaning a simple substitution won’t be possible,” an energy expert from Russia’s National Energy Security Fund said.
The news of the deal was taken by most observers to mean a further squeeze on Russian oil exports to India, although some analysts noted that India will be hard-pressed to reduce its intake of Russian crude, which accounts for about a third of total imports to date, up from a minuscule 2% before 2022.
For nearly four years, India imported so much Russian crude that Russia became its single biggest oil supplier, accounting for about a third of all imported crude. However, Indian refiners have recently scaled down purchases of Russian crude following the U.S. sanctions on Russia’s oil giants Rosneft and Lukoil.
Indian refiners have halted imports from the now-sanctioned entities and turned to non-sanctioned Russian supply and alternative cargoes from the Middle East, the Americas, and, to a lesser extent, West Africa, depending on prices. The deal with Trump will open up access to Venezuelan and possibly even Iranian oil, analysts said, following the news, to reduce purchases from Russia.