FX.co ★ India greatly benefits from cheap Russian oil

Generous sales of Russian natural resources are gaining momentum. Being under sanctions, Russia has to sell its oil and gas at very low prices. The volume of sold energy resources is increasing, whereas income is falling. Thus, oil prices are so low that it is really lucrative to sell the fuel to third parties.

When the first package of sanctions was imposed against Russia, India was buying oil just for its own use. Now, it purchases oil to sell it to other countries. Indian private oil refineries, which are the largest purchasers of cheap Russian oil, have started supplying the global market with products that contain Russian oil without disclosing their origin. Thus, in a simple way, India secretly earns from reselling Russian raw materials, using them in refined petroleum products such as gasoline, diesel, and chemicals. In May, fuel, which allegedly contained Russian oil, was delivered to some US states, including New York and New Jersey. Just after western consumers banned Russia’s oil supplies, the price of the commodity slumped compared to its analogues. Meanwhile, India benefited from the situation by buying large amounts of oil. According to some estimates, since the beginning of the special military operation in Ukraine on February 24, India has purchased about 62.5 billion barrels of Russian oil. This three times exceeds the amount of oil bought at the same period in 2021. What is more, consumers of Russian oil transfer it from one vessel to another in intermediate ports to hide its origin. At the end of May, it became known that China, another large consumer of Russian oil, also started using this scheme.