India has bought at least 13 million oil barrels from Russia since Feb. 24, compared with nearly 16 million barrels in all of 2021, given the huge discounts offered by Moscow since the Ukraine crisis.
India is the world’s third largest consumer of oil and imports over 80 percent of it from other countries. Last year, the majority of India’s oil supplies came from the Middle East, the United States, and Nigeria. In 2021, Russia only accounted for around two percent of India’s imports.
Moscow has been seeking new markets for its oil exports by offering discounts. Indian companies took advantage of the opportunity to increase imports from Russia and placed orders. However, in the wake of the sanctions on Russian banks, these companies are facing a challenge of how to finance these discounted purchases.
New Delhi and Moscow have been looking to establish a rupee-rouble trade system and discussions between financial officials from the two countries are ongoing. Other options for all possible payment mechanisms are also being explored.
The issue came up for discussion during Russian Foreign Minister Sergei Lavrov’s recent visit to New Delhi. His visit came just after British Foreign Secretary Liz Truss’s visit and U.S. Deputy National Security Advisor Daleep Singh’s visit to India, both trying to convince India against doing business with Russia.
