Opinion | How India’s purchases of Russian oil are reshaping global energy trade

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Western sanctions on Russia following its invasion of Ukraine have shifted global energy flows, with India and China emerging as prominent buyers of Russian oil. The question is no longer from whom New Delhi and Beijing will purchase energy, but in which currency they will pay.

Amid warming ties between India and China following US President Donald Trump’s imposition of sweeping tariffs on Indian exports after New Delhi refused to stop purchasing Russian oil, Indian traders are reportedly asking the country’s state refiners to pay for Russian oil in Chinese yuan. This move comes as China and India continue to normalise relations, largely thanks to Trump’s trade policies.

There are, however, fears in Washington that Trump’s actions could further encourage New Delhi to deepen its cooperation with Moscow and Beijing across various sectors. Aiming to prevent such an outcome, a group of 19 US Congress members recently urged Trump to end tariffs on India. Trump’s moves have already led to a deterioration in economic ties between the US and China while effectively helping Beijing increase its influence in Eurasia.

At this point, there are no indications Trump will change course and stop pressuring India to end its energy cooperation with Russia. But even if New Delhi did make a political goodwill gesture to appease Washington and stop purchasing Russian raw materials – which is unlikely – no one can guarantee the US will reduce tariffs.

Fully aware of Trump’s unpredictable policies, India seems to have begun adopting his strategy of setting impossible demands. New Delhi’s request to Washington to allow India to purchase oil from Iran and Venezuela in exchange for ending its energy ties with Russia was probably a calculated move aimed at demonstrating to US policymakers that it currently has no alternative to Russian oil.

From the Indian perspective, halting such purchases would be shooting itself in the foot. Russian supplies account for about a third of all crude arrivals in India, and New Delhi has saved at least US$12.6 billion by buying Russian oil over the past three years. India is unlikely to follow European nations and give up relatively cheap Russian energy to pay more for oil and gas from other producers.

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‘Fundamental obligation’: India’s foreign minister snubs Western sanctions on Russian oil

‘Fundamental obligation’: India’s foreign minister snubs Western sanctions on Russian oil