India free to buy oil anywhere: Russia after US deal
What's the story
Russia has said that India is free to buy crude oil from any country it wants. The statement came after United States President Donald Trump claimed, without confirmation from India or Russia, that Prime Minister Narendra Modi had agreed to stop buying Russian oil and instead purchase US crude and possibly Venezuela under a trade deal. Responding, Kremlin spokesperson Dmitry Peskov stressed that Russia has never been India's only energy supplier, adding there is nothing new in India's diversification efforts.
Statement
'We see nothing new here'
"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," Peskov said. However, Peskov stated that Moscow has received no official notification from India regarding the termination of Russian oil purchases.
Trade benefits
Russian foreign ministry says ready to continue close cooperation
Russian Foreign Ministry spokesperson Maria Zakharova also stressed that the trade of hydrocarbons is mutually beneficial and helps keep the global energy market stable. She said Russia is ready to continue close cooperation with India in this field. Meanwhile, energy analysts in Russia have said that fully replacing Russian crude oil isn't practical for Indian refiners due to differences in crude grades.
Refining challenges
Fully replacing Russian crude oil not practical for Indian refiners
Igor Yushkov from the National Energy Security Fund said US shale exports are mostly light grades, while Russia supplies heavier, sulfur-rich Urals crude. He said India would have to blend US oil with other grades, which would increase costs. Yushkov also noted that Russia usually delivers 1.5-2 million barrels per day to India, a volume the US can't easily match.
Import decline
India became largest buyer of discounted Russian crude
India imports nearly 88% of the crude it processes into fuels such as petrol and diesel. Until 2021, Russian oil accounted for only 0.2% of India's imports. However, after Western sanctions on Moscow over its invasion of Ukraine in February 2022, India became the largest buyer of discounted Russian crude. For months, Washington has repeatedly claimed that the purchase was indirectly funding the Ukraine war and imposed 25% tariffs over the move in addition to the 25% reciprocal tariffs.
Trump
US to reduce tariffs on Indian goods
Last week, Trump announced that the US has reached a trade deal with India. The agreement will see the US reduce tariffs on Indian goods from 25% to 18%. In return, he claimed India has agreed to stop importing Russian oil and instead purchase more than $500 billion worth of US energy, technology, agricultural, and other products.