An official, who declined to be named, said India was seeking to pay less than $ 70 a barrel on a delivery basis to overcome additional hurdles such as financing on purchases in high-level talks between the two countries. It is now known that the international market has reached $ 105 a barrel.
India has been importing more than 40 million barrels of crude oil from Russia since the outbreak of war in Ukraine in the last week of February. According to Bloomberg estimates, this is 20 per cent more than India’s oil imports from Russia in 2021. India imports more than 85 per cent of its oil consumption. India is one of the few countries currently buying crude oil, a key source of revenue for Russia.
Russia’s oil industry is under severe pressure as European countries gradually reduce purchases due to sanctions. The government expects production to fall by 17% this year. Sanctions on India’s discount from Russia have no effect on oil purchases. However, US pressure on India, including the tightening of international regulations on issues such as maritime insurance, is further complicating trade. India is not backing down despite pressure from countries like the US to get a huge discount on oil. India is also heavily dependent on Russia for arms imports.
If India agrees to India’s demand and delivers crude oil to Russia, government refineries will receive 15 million barrels a month, or one-tenth of imports. Authorities said they would benefit from the deal. Private refiners like Reliance Industries, Nayara Energy to whom they are buying directly.