India – the world’s biggest consumer of crude oil – has no “political strategy” for its purchases, External Affairs Minister S Jaishankar said at a press conference in Kyiv on Friday, shortly after a meeting between Prime Minister Narendra Modi and Ukrainian leader Volodymyr Zelensky.
Responding to a question about India overtaking China in importing Russian crude oil – the sale of which was banned by the West after Russia’s invasion of Ukraine in February 2022 – Mr Jaishankar also pointed to the volatile nature of the global crude oil market.
“India is a big oil consumer… we are a big oil importer because we don’t have oil. Now, it is not like there is a political strategy to buy oil… there is an oil strategy to buy oil… there is a market strategy.”
“So the numbers on where we import oil from will go up and down… it depends on the market. But certainly, I think it depends on, or is dictated by, a tight market… where large suppliers like Iran and Venezuela, who used to supply India, are now constrained from operating freely,” he said.
Mr. Jaishankar, who has repeatedly defended India’s continued purchases of Russian crude oil even after the war in Ukraine, said in Kyiv: “This is a factor that needs to be taken into account.”
“We informed Ukraine about the (current) market scenario. The fact that sanctions have been imposed on many producers has made the market very tight,” he had earlier said in response to another question, stressing that “it is in the interest of the world economy that oil prices remain reasonable and stable.”
However, analysts this morning said global oil prices remain “sensitive to fluctuations in demand” due to “weak manufacturing data from Europe, Asia and the United States”.
Also in February, Mr Jaishankar – who had criticised Western countries for continuing to buy oil from Russia during the early stages of the war – reaffirmed India’s stance on buying Russian oil despite sanctions.
“What should we have done? In many cases suppliers from the Middle East preferred Europe because of the higher prices. So either we would have had no energy… or we would have had to pay a lot more because you (European countries) were paying more,” he told German daily Handelsblatt.
Mr Jaishankar had then argued that India had “in a certain way stabilised the (global) energy market”. He said Indian consumers could not afford the high prices charged by the Middle East.
Read | “Russia has never harmed our interests”: S Jaishankar tells German daily
“If nobody bought crude oil from Russia, and everyone bought crude oil from other countries, prices in the energy market would rise even more,” he told the German publication.
Before the war in Ukraine, India rarely bought Russian crude oil because of high freight costs. However, by 2023, Moscow was selling about 1.66 million barrels per day, up from less than 700,000 in 2022.
India – the world’s third-biggest oil importer and consumer – has become the biggest buyer of Russian crude by sea route since Western countries halted purchases and imposed sanctions against Moscow.
India has paid for this crude oil in rupees, dirhams and Chinese yuan.
In May, multiple sources told Reuters that Reliance Industries, operator of the world’s biggest refining complex, had signed a one-year deal with Russia’s Rosneft under which it would buy at least three million barrels of oil a month, paid for in rubles.
Read | Reliance to buy 3 million barrels of Russian oil every month: Report
Payments in rubles were seen as important, as this would allow Moscow to avoid additional restrictions imposed on payments routed through Western banks and financial institutions.
Read | Indian refineries are buying more US crude oil amid tough sanctions on Russia
The West has made several attempts to include India in its sanctions; in April the United States sent officials to urge Delhi to maintain the price ceiling it had set to limit Moscow’s profits.
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