Russia Sanctions: India Profiting From Russian Oil Trade by Exporting Refined Petroleum

India is defying western sanctions to buy millions of barrels of discounted Russian crude oil, hiding their origin and exporting refined petroleum products with a big markup to make a huge profit. China has yet to increase its oil imports from Russia, according to news reports. Meanwhile, India's neighbors Bangladesh and Pakistan are abiding by western sanctions and paying much higher market prices to buy oil for their domestic needs, and hurting their people. Such double standards are not going unnoticed. 

India's Refined Petroleum Exports.Source: MarketWatch

India is importing large amounts of deeply discounted Russian crude, running its refiners well above capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe, according to MarketWatch.  “As the EU weans from Russian refined products, we have a growing suspicion that India is becoming the de facto refining hub for Europe,” said Michael Tran, global energy strategist at RBC Capital Markets, in a Tuesday note. Here’s how the puzzle pieces fit together, according to Tran:

"India is buying record amounts of severely discounted Russian crude, running its refiners above nameplate capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe. In short, the EU policy of tightening the screws on Russia is a policy win, but the unintended consequence is that Europe is effectively importing inflation to its own citizens. This is not only an economic boon for India, but it also serves as an accelerator for India’s place in the new geopolitically rewritten oil trade map. What we mean is that the EU policy effectively makes India an increasingly vital energy source for Europe. This was historically never the case, and it is why Indian product exports have been clocking in at all-time-high levels over recent months". 

Bangladesh and Pakistan are afraid to buy Russian oil for fear of western sanctions while American ally India feels free to do so. As Pakistani Finance Minister Miftah Ismail told CNN's Becky Anderson in an interview, “It is very difficult for me to imagine buying Russian oil. At this point I think that it would not be possible for Pakistani banks to open LCs or arrange to buy Russian oil". Similarly, Bangladeshi Foreign Minister AK Abdul Momen told journalists: “You are seeing that they (western nations) keep bossing us and you (journalists) also encourage them. Every day, they come up with new issues. We used to call them development partners. They do not pay for the development but keep giving advice.” “We do not want to get into any problem. We want peace in the world,” Momen added. 

The West, particularly the United States, is turning a blind eye to India's actions when it comes to busting sanctions on Russia. Indian Prime Minister Narendra is openly funding the war in Ukraine by buying weapons and oil from Russia. At the same time, India's smaller neighbors feel intimidated by the threat of western sanctions if they follow Modi's example. Such double standards are not going unnoticed. 

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Comments

Indo said…
Factbox-Who is buying Russian crude oil and who has stopped​

https://www.investing.com/news/commodities-news/factboxwho-is-buying-russian-crude-oil-and-who-has-stopped-2831928


CURRENT BUYERS

BHARAT PETROLEUM

Indian state-run refiner Bharat Petroleum Corp Ltd has bought 2 million barrels of Russian Urals for May loading from trader Trafigura, two people familiar with the purchase said.

The company regularly buys Russian Urals for its 310,000 barrels per day (bpd) Kochi refinery in southern India.

HINDUSTAN PETROLEUM,

India's state refiner bought 2 million barrels of Russian Urals for May loading, according to trading sources.

INDIAN OIL CORP

India's top refiner has bought more than 6 million barrels of Urals since Feb. 24 and has a supply contract with Rosneft for up to 15 million barrels of Russian crude in 2022.

ISAB

Italy's largest refinery, owned by Lukoil-controlled Swiss-based Litasco SA, continues to buy Russian crude, while the Italian government has been looking into the possibility of temporarily nationalising ISAB.

LEUNA

The land-locked Leuna refinery in eastern Germany, majority-owned by France's TotalEnergies, continues to buy Russia crude fed by the Druzhba pipeline.

MANGALORE REFINERY AND PETROCHEMICALS

The state-run Indian refiner has bought 1 million barrels of Russian Urals crude for May loading via a tender from a European trader, a rare purchase driven by the discount offered.

MIRO

Germany's largest refinery, 24% owned by Russia's Rosneft, continues to buy Russian crude, which accounts for about 14% of the total intake..

MOL

The Hungarian oil company has said it would take at least 2-4 years to fully switch its two refineries in Slovakia and Hungary to alternative crude processing, which currently accounts for about 35% of total intake.

NAYARA ENERGY

The Indian private refiner, part-owned by Rosneft, has purchased Russian oil after a gap of a year, buying about 1.8 million barrels of Urals from Trafigura.

NEFTOCHIM BURGAS

A Bulgarian refinery, owned by Russia's Lukoil, continues to refine Russian crude, which accounts for about 50% of its intake, according to government officials.

PCK SCHWEDT

Germany's PCK Schwedt refinery, 54% owned by Rosneft, continues to buy Russian crude fed via the Druzhba pipeline.

German government officials have said they were looking to replace Russian crude with alternative imports via the German port of Rostock or via ports of neighbouring Poland to keep the refinery running.

PERTAMINA

Indonesian state energy firm PT Pertamina is considering buying crude oil from Russia as it seeks oil for a newly revamped refinery.

SINOPEC

China's state-run Sinopec (NYSE:SHI), Asia's largest refiner, is continuing to purchase Russian crude under previously signed long-term contracts.

FORMER BUYERS

BP (NYSE:BP)

The British oil major has exited Russia and said it would no longer make new deals with Russian entities for loading at Russian ports unless "essential for ensuring security of supplies".

ENEOS

Japan's biggest refiner has stopped buying crude oil from Russia, and plans to source alternative supplies from the Middle East.

ENI (BIT:ENI)

The energy group, 30.3% owned by the Italian government, has suspended purchases of Russian oil, including for Germany's Bayernoil refinery, where it has a minority stake.

EQUINOR

Norway's majority state-owned energy firm has stopped trading Russian oil and exited Russia, recording a $1.08 billion impairment in its first-quarter earnings report

GALP

The Portuguese oil and gas company has suspended all new purchases of petroleum products from Russia or from Russian companies.

GLENCORE

The global mining and trading firm said it would not enter any new trading business relating to Russian-origin commodities unless directed by the relevant government authorities.
Riaz Haq said…
Russian Oil Producers Stay One Step Ahead of Sanctions
Shippers and refiners hide origin of Russian oil, and some is getting into the U.S.

https://www.wsj.com/articles/russian-oil-producers-stay-one-step-ahead-of-sanctions-11654076614

Indian refined oil-product exports, beefed up by cheap Russian supplies, have grown sharply since the beginning of the war. Daily shipments to Europe have risen by a third and by 43% to the U.S. on a quarterly basis.

“If Indian refineries on the west coast have been importing lots of Russian crude then yes, probably there will be some Russian crude that has gone into the making of these products,” said Koen Wessels, an oil-products analyst at consulting firm Energy Aspects.

This comes at a time when gasoline and diesel prices have hit records in the U.S. due to high crude prices, weighing on consumers at a time when inflation was recently at a four-decade high. Extra supply from abroad may be less scrutinized, analysts said.

-------

Europe just targeted Russian crude with its toughest sanctions yet, but shippers and refiners are getting the oil to market by obscuring its origins. Some fuels believed to be partially made from Russian crude landed in New York and New Jersey last month.

The cargoes were brought through the Suez Canal and across the Atlantic from Indian refineries, which have been big buyers of Russian oil, according to shipping records, Refinitiv data and analysis by Helsinki-based think tank Centre for Research on Energy and Clean Air.

In the wake of the invasion of Ukraine and sanctions from the U.S. and the European Union, traders are working to obscure the origins of Russian oil to keep it flowing. The oil is being concealed in blended refined products such as gasoline, diesel and chemicals.

Oil is also being transferred between ships at sea, a page out of the playbook used to buy and sell sanctioned Iranian and Venezuelan oil. The transfers are happening in the Mediterranean, off the coast of West Africa and the Black Sea, with oil then heading toward China, India and Western Europe, according to shipping companies.

A refinery owned by Indian energy giant Reliance Industries Ltd. bought seven times more Russian crude in May, compared with prewar levels, making up a fifth of its total intake, according to Kpler.

Reliance chartered an oil tanker to carry a cargo of alkylate, a gasoline component, departing from the nearby Sikka port on April 21 without a planned destination. Three days later, it updated its records with a U.S. port and sailed over, discharging its cargo on May 22 in New York.

“What likely happened was Reliance took on a discounted cargo of Russian crude, refined it and then sold the product on the short-term market where it found a U.S. buyer,” said Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air. The organization is tracking Russian fossil fuel exports and their role in funding the Ukraine war. “It does look like there’s a trade where Russian crude is refined in India and then some of it is sold to the U.S.”

Reliance didn’t respond to a request for comment. Its joint chief financial officer, Srikanth Venkatachari, said in a May 6 briefing that the company has minimized feedstock cost by sourcing “arbitrage barrels.”
Riaz Haq said…
Handle the India-U.S. Relationship With Care
The world’s largest democracy often sees things very differently than America.

By Walter Russell Mead

https://www.wsj.com/articles/india-handle-with-care-modi-china-russia-narendra-democracy-hindu-america-blinken-11654539987


Superficially, the U.S.-India relationship looks like a success. With both countries focused on China, business ties steadily deepening, and U.S.-Pakistan relations in a deep freeze, many of the old obstacles to the relationship have disappeared.

But an intense week of meetings in Bangalore and Delhi with politicians, think tankers, religious leaders and journalists made clear that while Americans and Indians share strategic and economic interests, and we both value democracy, we remain divided by important differences in values and perceptions. Unless managed carefully, these differences could derail U.S.-India cooperation at a critical time.

Americans and Indians often see the same problem in very different ways. India, for example, does not see Russia’s attack on Ukraine as a threat to world order. While Americans have been disturbed by India’s continued willingness to buy oil from Russia, Indians resent the West’s attempt to rally global support for what many here see as a largely Western problem in Ukraine. Pointing out that Europeans scarcely noticed China’s attacks on Indian frontier posts in 2020, Foreign Minister Subrahmanyam Jaishankar told a conference in Bratislava, Slovakia, last week that “Europe has to grow out of the mindset that Europe’s problems are the world’s problems.”

More generally, Indians bristle when they sense Americans and Europeans getting together to write global rules. The more that American Wilsonians talk about a values-based international order, the more that Indians worry about Western arrogance. Many Indians want a strong Russia and, within limits, a strong China precisely to help guard against the kind of world order President Biden and many of his advisers want to build.

This is more than the postcolonial suspicion of Western intentions that India has long shared with many other non-Western countries. The Hindu nationalist movement that has replaced the long-ruling Congress Party with a new political system built around the Bharatiya Janata Party and its charismatic leader, Narendra Modi, has brought a new dynamism to Indian foreign policy. This new nationalist India wants to increase and develop Indian power, not submerge Indian sovereignty in Western-designed international institutions.

The domestic agenda of the Hindu nationalist movement can also cause problems for the U.S.-India relationship. For Hindu nationalists, the rule of the Muslim Mughal emperors, some of whom destroyed ancient Hindu temples and built mosques on their ruins, was as much a disaster as British colonialism for Indian civilization. It is not enough to send the British packing; the liberation of India means placing Hindu civilization back at the center of Indian cultural and political life. Many BJP supporters want the Indian government to defend India’s Hindu civilization and culture from Islam, Christianity and Western secular liberalism.

Riaz Haq said…
Handle the India-U.S. Relationship With Care
The world’s largest democracy often sees things very differently than America.

By Walter Russell Mead

https://www.wsj.com/articles/india-handle-with-care-modi-china-russia-narendra-democracy-hindu-america-blinken-11654539987

This form of Hindu nationalism leads to controversial policy initiatives. Tough restrictions on the ability of foreign organizations to fund civil-society groups in India threaten to disrupt the activities of American charities ranging from the Ford Foundation to the Catholic Church. Anti-conversion laws put obstacles in the path of both Christian and Muslim missionary efforts, and Hindu women wishing to marry out of the faith sometimes face severe social and governmental pressures. Communal violence, a problem in India since the days of the British raj, has risen in recent years. Indian Muslims often express fears for their personal security.

American human-rights groups have responded to these developments with increasing concern, and last week Secretary of State Antony Blinken named India as a country “where religious freedom and the rights of religious minorities are under threat.” Such statements do more to trigger anticolonial and anti-Western sentiments than to relieve minority communities. Hindu nationalism is, among other things, a demand that Indian civilization be accepted as the moral and spiritual equal of the West. America has its racial problems and mass shootings, Indians say. What gives Americans the right to tell India how to live?

These conflicts aren’t going away and will likely get worse over time. Hindu nationalism is here to stay. So are India’s communal tensions, and so too for that matter is the belief of many Americans that they have a solemn duty to tell people in other countries and cultures how to live—and to impose sanctions on those unhappy occasions when they fail to take our advice. If bilateral relations are to prosper, Indians and Americans need to find better ways to manage these chronic issues.

India and the U.S. are raucously democratic societies, and their foreign policies cannot ignore public opinion. Managing this critical relationship is never going to be easy. Building deeper ties between the two societies will help; so too will quiet, low-key conversations aimed at preventing blowups before they occur. Both sides need this relationship; we both need to focus on making it work.
Riaz Haq said…
China and India buy more Russian oil, blunting Western sanctions
Both countries take advantage of discounts as buyers disappear


https://asia.nikkei.com/Business/Energy/China-and-India-buy-more-Russian-oil-blunting-Western-sanctions

TOKYO -- China and India have increased Russian oil purchases as prices decline due to Western import bans, the latest data shows, creating a loophole that allows Moscow to secure export revenue.

China imported 800,000 barrels of Russian petroleum daily by sea last month, according to data from Refinitiv, a figure that does not include oil delivered via pipelines. The volume has soared by more than 40% from January.

The number indicates that China is deliberately going after cheap Russian crude. India's marine imports of Russia's oil also spiked from zero in January to nearly 700,000 barrels a day in May.

China and India have expanded imports because "Western sanctions have reduced the number of buyers, meaning Russian crude oil can be purchased cheaply," said Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., the state-backed energy explorer known as JOGMEC.

Following similar action by the U.S., the European Union agreed to ban imports of Russian oil last week, immediately halting imports on two-thirds of the petroleum. The bloc plans to end roughly 90% of purchases by year's end. More companies in Western economies are shying away from procuring Russian oil as well.

As a result, Russia's Urals crude, mostly bound for the European market, currently trades around $90 a barrel. In contrast, the Brent crude international benchmark sells about $35 higher.

Russia's ESPO crude -- mostly exported to Asia -- costs around $94 per barrel, roughly $20 below Dubai crude, which serves as Asia's benchmark. The prices differed by just a few dollars at the start of the year.

But the price of Urals crude has gained roughly 30% since a year earlier. The rise in international oil prices is one factor, and the growing imports by China and India buttress Russian oil prices amid the sanctions.

Russia's revenue from oil exports between January and April has climbed 50% on the year, the International Energy Agency said.

Russian coal benefits from a similar dynamic. Despite Western import bans, the price hovered around $148 a ton in late May, according to data from Argus Media, based on assessments at Baltic ports.

Though the value is well below the roughly $330 a ton for ICE Rotterdam coal futures in that period, Russian coal is still double the price from a year earlier. India, China and a few other importers have helped propped up the product.

For liquefied natural gas, Asian prices are in the mid-$20 range per 1 million British thermal units, but China-bound Russian LNG is "being traded at a significant discount," said Toshiyuki Makabe, managing director of commodities sales at Goldman Sachs.

Beijing's purchases of Russian LNG during May were in line with year-earlier volume, due largely to China's COVID lockdowns, but imports could rise again this summer on air conditioning demand. There are reports of Indian buyers purchasing Russian LNG on the spot market.

Meanwhile, pipeline deliveries of Russian gas to Europe have diminished only by a limited extent apart from halted supplies to Poland. These LNG sales do not appear subject to the types of discounts seen in Asia.

The U.S. and Europe are urging China and India to refrain from buying Russian oil and coal. But cheap Russian supplies present an enormous economic advantage given the soaring global energy prices.

India's Ministry of Petroleum and Natural Gas said last month that "energy purchases from Russia remain miniscule in comparison to India's total consumption." Pulling back from Russian imports "will lead to further volatility and instability, jacking up international prices," the ministry warned.
Riaz Haq said…
Richard Walker
@rbsw

THREAD
INDIA’S DILEMMA: New 3-part series

The world needs to think about India

Delhi is under severe geopolitical pressure:
- Reliant on Russia
- Threatened by China
- Wary of the West

Now Russia’s war on Ukraine is forcing Delhi to face up to some massive choices

1/

https://twitter.com/rbsw/status/1535277477337219074?s=20&t=Kn_-1ia986Il4iY26P7upw

--------------

INDIA’S DILEMMA
Part 1: Russia Goes Rogue

India is under huge pressure to break with Russia over its war on Ukraine.

Russia is a key supplier of arms and defence tech. But as the war pushes it closer to China, there are growing calls for a rethink.

https://youtu.be/9ASkO-f0wFM

-------------------------

INDIA’S DILEMMA
Part 2: The China Threat

The Chinese threat to India is totally under-reported
- World’s largest territorial dispute
- China claims an entire Indian state
- 2020 clashes killed 20, still unresolved
- India fears being surrounded

3/

-----------

INDIA’S DILEMMA
Part 2: The China Threat

Watch part 2 in full ->

https://youtu.be/Iz_JdQSrzBg

4/

---------------

INDIA’S DILEMMA
Part 3: The Call of the West

West wants India to join democratic pushback against authoritarians

India needs friends

Why not get together?
- India sees West as lecturing & hypocritical
- Demands access to defence tech
- West has deep concerns over Modi govt

5/

--------------

INDIA’S DILEMMA
Part 3: The Call of the West

Watch Part 3 in full ->

https://youtu.be/OshZy7fhJKo

6/
Riaz Haq said…
Stephen Stapczynski
@SStapczynski
Europe's campaign to quit Russian fuel plunges Pakistan into darkness ����⚡

EU's energy policy is designed to punish Moscow for the war in Ukraine. But it's also wreaking havoc thousands of miles away as Pakistan grapples with a gas shortage

https://twitter.com/SStapczynski/status/1536533469807132672?s=20&t=F1kOE5uVA2NGxqqCUeG68g

----------------

Europe's campaign to quit Russian fuel is designed to punish Moscow for its invasion of Ukraine. It's also wreaking havoc thousands of miles away from the conflict, plunging Pakistan into darkness, undermining one regime and threatening the stability of the country's new leadership.
A decade ago, the world's fifth-most populous country took specific steps to insulate itself from the kinds of violent price spikes that are roiling the market today. It made a massive investment in liquified natural gas and signed long-term contracts with suppliers in Italy and Qatar. Now some of those suppliers have defaulted, though they continue to sell into the more lucrative European market, leaving Pakistan in exactly the position it tried so hard to avoid.

In order to avoid blackouts during the Eid holiday last month, the government paid nearly $100 million to procure a single LNG shipment from the spot market, a record for the cash-strapped nation. In the fiscal year ending July, the country's costs for LNG could top $5 billion, twice what they were a year ago. Even so, the government can't cushion the blow for its citizens: The International Monetary Fund is in talks to bail out the nation with a key condition that it cuts fuel and electricity subsidies.

Now parts of Pakistan are experiencing planned blackouts of more than 12 hours, limiting the effectiveness of air conditioning to offer relief during the ongoing heatwave. The previous prime minister continues to draw large crowds to rallies and protests, amplifying citizens' anger about inflation that's rising at 13.8%. Prime-time talk show hosts regularly discuss how Pakistan will get the fuel it needs, and how much it will have to pay.

Last week, the government announced a new raft of energy-saving measures. Civil servants were released from regular Saturday shifts, and the budget for security personnel was slashed 50%.

"I am acutely aware of the hardships people are facing," Prime Minister Shehbaz Sharif said in a tweet in April ahead of the Eid holiday. He ordered his government to resume purchasing expensive overseas natural gas shipments that same week. And earlier this month he warned that they don't have enough money to continue buying gas from overseas.

The supply crunch will go beyond blackouts. The government has redirected existing natural gas supplies to power plants, short-changing fertilizer makers that depend on the fuel as a feedstock. That move could threaten the next harvest, leading to even higher food costs next year. Cellphone towers are using backup generators to sustain service through the blackouts, but they too are running out of fuel.

There's little reprieve on the horizon. The cost of LNG has surged by more than 1,000% in the last two years, first on post-pandemic demand, then on the Russia invasion of Ukraine. Russia is Europe's biggest supplier of natural gas, and the threat of supply disruptions sent spot rates to a record in March.



https://www.ndtv.com/world-news/pakistans-12-hour-blackouts-linked-to-a-massive-shift-in-europe-3064863

Riaz Haq said…
Meanwhile, Europe has been demanding more and more LNG. So far this year, Europe's LNG imports are up 50% from the same period last year and aren't showing any sign of slowing down. Policymakers in the European Union drafted a plan to significantly increase LNG deliveries as an alternative to Russian gas as they break ties with President Vladimir Putin's regime over the war in Ukraine. Countries like Germany and the Netherlands are fast-tracking the construction of floating import terminals, with the first ones slated to start within the next six months.

https://www.ndtv.com/world-news/pakistans-12-hour-blackouts-linked-to-a-massive-shift-in-europe-3064863

"Europe is sucking LNG" from the world, said Steve Hill, executive vice president at Shell Plc, the world's top trader of the fuel. "But that means less LNG will go to developing markets."

Not long ago, Pakistan represented the future for the LNG industry. By the mid-2010s, demand for the fuel, gas cooled to 162 degrees Celsius so it can be shipped around the world via tanker, had plateaued in developed markets. But technological advancements had brought down the costs and construction times for import terminals, and new gas fields cut the prices of the fuel itself.

At the new, lower prices, poorer countries could finally consider the fuel. Suppliers set their sights on these new markets, and when Pakistan issued a tender for long-term LNG supplies, more than a dozen companies bid for its business.

In 2017, Pakistan selected Italy's Eni SpA and trading house Gunvor Group Ltd to supply the country with LNG into the next decade. At the time, the terms were considered good, and the prices were lower than a similar contract signed with Qatar the previous year.

Now, though, the two suppliers have canceled more than a dozen shipments scheduled for delivery from October 2021 through June 2022, coinciding with the surge in European gas prices.

Such defaults are almost unheard of in the LNG industry, said Bruce Robertson, an analyst at the Institute for Energy Economics and Financial Analysis. Traders and industry insiders interviewed by Bloomberg couldn't remember the last time so many cargoes were scrapped without being directly related to a major outage at an export facility.

Eni and Gunvor have said they had to cancel because they're facing their own shortages and don't have the LNG to send to Pakistan. Typically when exporters face those kinds of challenges, they replace the deliveries by buying a shipment on the spot market, but Eni and Gunvor haven't done that.

Gunvor declined to comment for this story. Eni's supplier didn't meet their obligation, and was therefore forced to default on shipments to Pakistan, the Italian company said in an emailed statement, also noting that it did not take advantage or benefit from the cancellations and applied all contractual provisions to manage such disruptions.

Suppliers are usually loathe to cancel. It damages the business relationship, and it's often very, very expensive. Developed markets typically demand "failure to deliver" penalties of up to 100%. According to Valery Chow, an analyst at Wood Mackenzie Ltd., "it's very rare for LNG suppliers to renege on long-term contracts beyond force majeure events."

Pakistan's contracts called for a more modest 30% penalty for cancellation, most likely in exchange for lower prices overall. At this point, prices in the European spot market are high enough to more than offset those penalties. An LNG shipment for May delivery to Pakistan via a long-term contract would cost $12 per million British thermal units, according to Bloomberg calculations. For comparison, a May delivery spot cargoes to Europe were being traded at over $30. Eni and Gunvor have continued to meet their commitments to clients there.

Riaz Haq said…
So now Pakistan is back to the drawing board, in a worse negotiating position than before. Prime Minister Imran Khan was ousted in April after a fallout with Pakistan's army over a range of issues, including his management of energy supplies and the larger economy.

https://www.ndtv.com/world-news/pakistans-12-hour-blackouts-linked-to-a-massive-shift-in-europe-3064863


The new prime minister, Shehbaz Sharif, has ordered the state-owned importer to procure the fuel at any cost to halt the crippling blackouts. It's also trying to negotiate new long-term LNG purchase agreements, though the terms will certainly be worse than they were six years ago. The government "will go for the most favorable deal," the Ministry of Energy said in a statement to Bloomberg News.

The expense is creating its own knock-on effects. The country is now "at high risk of default," the Institute for Energy Economics and Financial Analysis said in a note published last month. Moody's Investors Service downgraded its outlook on Pakistan to negative from stable, citing financial concerns that includes a delay in an IMF bailout.

Pakistan's reliance on LNG and its suppliers' willingness to default has worsened the energy crisis in the country. And Pakistan isn't alone. Emerging nations around the world are struggling to meet the needs of their citizens within the constraints of their budgets.

It's also driven them to buy energy from Russia, dampening the effects of Europe's efforts to cut them off.

In the face of financial crisis and massive oil shortages, Sri Lanka has turned to Russia to procure fuel. Pakistan is also exploring long-term contracts with Russian LNG suppliers. India has already boosted purchases from Russia, a trend that may accelerate. In response to the blistering summer heat, the government has ordered power plants to buy fuel from overseas.

Pakistan's woes also bode poorly for other cash-strapped importers, including Bangladesh and Myanmar. The state-owned utility in Bangladesh recently procured the nation's most expensive LNG shipments from the spot market to keep the grids running and industries stocked, while Myanmar has halted imports for the last year due to the run-up in prices.

Europe's massive shift may prompt other countries, like India and Ghana, to rethink long-held plans to increase dependence on the super-chilled fuel. Governments would instead double down on dirtier-burning coal or oil, frustrating efforts to reach ambitious pollution-reduction targets this decade.

In a recent note, Fereidun Fesharaki, chairman of industry consultant FGE, sharply criticized European energy policies for creating "higher prices, economic scarcity and economic misery" around the world. "It is ok for Europe to decide what they want within their borders," he wrote. "But it is unfair and unreasonable to export the mess abroad, especially to the developing world."
Riaz Haq said…
In #Russia’s War On #Ukraine, #China and #India Emerge as Financiers. Their purchases of Russian crude are undermining the #West’s efforts to isolate the #Kremlin and upending the global #oil markets. #energy #gas #LNG #Modi #BJP https://www.nytimes.com/2022/06/24/business/russia-oil-china-india-ukraine-war.html?smid=tw-share


“They’ve squeezed every other source of oil we have and then say, OK, guys, you must not go into the market and get the best deal for your people,” Mr. Jaishankar said. “I don’t think that’s a very fair approach.”


----------

As Russia tries to break the stranglehold of sanctions, China and India are emerging as Moscow’s pivotal financiers by purchasing large amounts of Russian crude, putting themselves in the middle of the messy war with Ukraine and a geopolitical standoff with the West.

It’s a complex calculation for China, India — and the global economy.

Buying cheap oil from Russia offers economic and political advantages. China can diversify its oil supplies for national security reasons, while India can make billions exporting refined products like gasoline and diesel.

But undercutting European and American efforts to isolate the Kremlin risks serious diplomatic fallout that neither country wants. China has avoided overtly supporting Russia’s war in public statements, and India has portrayed itself as neutral.

The two countries, with the demand from their enormous domestic markets and the supplies from their vast refineries, are also central in determining the direction of oil prices. Their purchases of Russian crude in recent months have helped ease the pressure.

Their ultimate appetite for Russian oil will either shake or support the global economy, another complicating factor in the West’s capacity to stay united through a war of attrition in Ukraine. So far, the West has remained steadfast in its commitment to Ukraine, but a long period of high fuel prices and potential shortages in Europe could become politically unpalatable.


“One of the consequences of this conflict is a fundamental realignment of the global energy system, trading relationships and geopolitical alignments, with China and India more closely aligned with Russia,” said Jason Bordoff, who is director of Columbia University’s Center on Global Energy Policy and was an adviser to President Barack Obama.

Russia’s biggest export, oil is the currency of war, funding the bullets and rockets deployed on the battlefield in Ukraine. The West is trying to cut off the financial spigot, in part by weaning Europe, Russia’s biggest market, off its energy dependence through sanctions.

Four months into the war, Russian crude oil exports are down only slightly, as sales to China and India have largely filled the gap left by Europe. India and China bought roughly 2.4 million barrels of Russian crude a day in May, half of Russia’s exports. At least some is being refined into diesel and other fuels, and exported around the world, including to countries that oppose the invasion.

China and India have been buying at a 30 percent discount to the global benchmark price, a boon to both economies in a world buffeted by rising inflation. Despite the discounts, Russia’s oil revenues are growing, since prices have climbed to more than $100 a barrel.

The shift is just beginning, and the amounts of oil involved are still relatively small. The real test of China’s and India’s willingness to buy Russian oil will come when sanctions take full effect.
Riaz Haq said…
India's Russian coal purchases spike despite sanctions

https://www.reuters.com/markets/commodities/exclusive-indias-russian-coal-buying-spikes-traders-offer-steep-discounts-2022-06-18/


India's Russian coal buying May 27-June 15 up 6-fold-govt data
India's Russian oil buying May 27-June 15 up 31-fold-govt data
June Russia coal imports seen at multi-year high - Refinitiv
Bulk shipments of Russian thermal coal began third week of May


India's purchases of Russian coal have spiked in recent weeks despite global sanctions on Moscow, as traders offer discounts of up to 30%, according to two trade sources and data reviewed by Reuters.

Russia, facing severe Western sanctions over its invasion of Ukraine, warned the European Union in April against sweeping sanctions on coal, saying they would backfire as the fuel would be redirected to other markets.

India has refrained from condemning Russia, with which it has longstanding political and security ties, while calling for an end to violence in Ukraine. New Delhi defends its purchases of Russian goods as part of an effort to diversify supplies and argues a sudden halt would jack up world prices and hurt its consumers.

U.S. officials have told India there is no ban on energy imports from Russia but they do not want to see a "rapid acceleration".

Yet as European importers shun trade with Moscow, Indian buyers are lapping up huge quantities of Russian coal despite high freight costs.

Its purchases of coal and related products jumped more than six-fold in the 20 days through Wednesday from the same period a year earlier to $331.17 million, according to unpublished Indian government data reviewed by Reuters.

Indian refiners similarly have snapped up cheap Russian oil shunned by Western countries. The value of India's oil trade with Russia in the 20 days through Wednesday jumped more than 31-fold to $2.22 billion, the data showed.

India's trade ministry did not immediately respond to a request for comment on Saturday.

"The Russian traders have been liberal with payment routes and are accepting payments in Indian rupee and United Arab Emirates dirham," one source said. "The discounts are attractive, and this trend of higher Russian coal purchases will continue."

COAL BUYING TO CONTINUE
Offshore units of such Russian coal traders as Suek AG, KTK and Cyprus-based Carbo One in places including Dubai and Singapore offered discounts of 25% to 30%, triggering bulk purchases of Russian thermal coal by traders supplying to utilities and cement makers, the sources said.

The second source said the Singapore-based unit of Suek was also accepting payments in dollars.

Suek and KTK did not immediately respond to requests for comment. Reuters could not immediately reach Carbo One.

The EU ban has barred new coal contracts and by mid-August will force members nations to terminate existing ones.

India bought an average $16.55 million of Russian coal a day in the three weeks through Wednesday, more than double the $7.71 million it bought in the three months after Russia's Feb. 24 invasion, according to Reuters calculations.

Oil purchases averaged $110.86 million a day in the 20-day period, more than triple the $31.16 million it spent in the three months ended May 26.

Indian bulk buying of Russian coal is set to continue, with June imports expected to be the most in at least seven and a half years, Refinitiv Eikon ship tracking data showed.

Bulk shipments of Russian thermal coal started reaching India in the third week of May, with orders mainly from cement and steel firms and traders, according to shipping data compiled by an Indian coal trader.
Riaz Haq said…
Sanctions-Ravaged Russia Offers Opportunities for Indian Firms
Putin says Indian retailers in talks to open stores in Russia
India has already been snapping up cheap Russian crude oil

https://www.bloomberg.com/news/articles/2022-06-30/sanctions-ravaged-russia-offers-opportunities-for-indian-firms#xj4y7vzkg

June 29, 2022 at 8:00 PM PDT


Indian companies are looking to bolster their operations in Russia, eyeing the opening left by the exodus of European, American and Japanese companies after the country’s invasion of Ukraine.

From drugmakers to consumer good firms, a number of Indian companies are either bagging new projects or are gearing up to pitch for more contracts as Moscow seeks fresh partners and vendors to fill the void. Indian retailers are also in talks to open stores in Russia, President Vladimir Putin told a BRICS business forum last week.
Riaz Haq said…
#India's #payment giant #NPCI has #SWIFT alternative for 32 million #NRIs. UPI (Unified Payment Infrastructure) linkage with other nations will anchor #trade, #travel, #remittance flows between countries & lower the cost of cross-border transactions https://www.livemint.com/news/india/payment-giant-npci-has-swift-alternative-for-32-million-indian-expats-11657074479843.html?utm_source=share&utm_medium=social&utm_campaign=share_via_web

The company that built India’s digital payments backbone plans to make it cheaper and easier for the nation’s 32 million expatriates to bring their money home.

Indians overseas remitted $87 billion last year, the biggest inflow for any country tracked by the World Bank. The remittances market, where it costs $13 on average to send $200 across borders, is ripe for disruption, according to Ritesh Shukla, chief executive officer of NPCI International Payments Ltd.

“We have displaced cash in India to a large extent and are now looking to repeat the success in cross-border corridors," said Shukla. “Overseas Indians can use our rails to remit money inwards straightway into their bank accounts, and for the markets where Indians travel frequently, we will build acceptance for our instruments."


Successful overseas forays by NCPI would give India a home-grown alternative to SWIFT, the Belgium-based cross-border payment system operator, though Shukla stressed that the objective was not to displace existing platforms. About 330 banks and 25 apps -- including Alphabet Inc.’s Google Pay and Meta Platform Inc.’s WhatsApp -- share NCPI’s unified payment interface, which has helped make instantaneous digital transactions a $3 trillion market in India.

NPCI is in the process of connecting the UPI platform to systems in other countries to replicate its domestic success. It is negotiating collaborations with governments, fintech companies and service providers around the world, aiming to reduce transaction costs and enable more small-ticket transactions, Shukla said.

Cutting Costs

“This is going to take the payments world by storm," said Mayank Goyal, CEO of moneyHop, a cross-border banking app that lets users make international remittances through the SWIFT network. The company will seek to integrate UPI rails into the app as it makes cross-border payments easier, Goyal said.

UPI’s linkage with overseas nations will further anchor trade, travel and remittance flows between the countries and lower the cost of cross-border remittances, the Reserve Bank of India said in a report.

Riaz Haq said…
#India under spotlight for 'laundering' Russian #oil. #US officials believe #Russian crude is being refined in #India and then exported to US & #Europe, circumventing #sanctions that have been imposed on Russia for its invasion of #Ukraine.- Nikkei Asia
https://asia.nikkei.com/Business/Energy/India-under-spotlight-for-laundering-Russian-oil

U.S. State Department Senior Adviser for energy security Amos Hochstein said in a Senate hearing on June 9 that he advised Indian officials to refrain from buying Russian oil. "I would ask two things. One, don't go too far. Don't look like you're taking advantage of the pain that is being felt in European households and the United States. Second, make sure you negotiate well, because if you don't buy [the oil], nobody else [will]," he said.

While it is difficult to identify the source of crude once it has been processed, the numbers tell their own story. According to financial information provider Refinitiv, nearly 24 million barrels of Russian crude oil arrived in India in May, more than eight times the amount a year earlier. In June, the number remained high at more than 20 million barrels.

Imports of Russian oil have surged since Moscow launched its invasion of Ukraine in February. Sales in India are estimated at close to $1.9 billion in May alone, making it an important source of income for Putin's government.

Around 26 million barrels of Russian oil are believed to have arrived in Sikka alone between April and June, 5.3 times more than the level a year earlier. Russian oil comprises 20% of the total delivered to Sikka via sea.

India processes crude oil into exports such as gasoline, diesel fuel and jet fuel. Oil products exported from the port in Sikka totaled around 75 million barrels in the April-June period, with 20% going to Europe or the U.S.



"Oil is not separated and stored in different tanks by source," said an employee at a major Japanese oil wholesaler. "It's almost impossible to precisely locate where imported oil is from."

Reliance Industries declined to comment on the allegations that Russian crude oil might be getting mixed in with raw materials for petroleum products exported to the West.

Indian External Affairs Minister Subrahmanyam Jaishankar was more dismissive, saying, "Not even heard about anybody in India thinking along the lines of [buying Russian oil and selling it to somebody else]" at the GLOBSEC 2022 Forum in Bratislava on June 3.

Urals crude is $30 to $40 cheaper per barrel than benchmark Brent crude oil, which is particularly attractive to India, given its concerns over its trade deficit.

China, too, has increased imports of Russian crude by a significant 55% in May from a year ago, according to Reuters. It appears that China is buying undervalued Russian crude oil and gas for its own consumption and to add to what it has been buying from Europe and other countries.

While Russian crude exports are expected to decrease over the long term, purchases by China and India will support its prices.

Furthermore, the shift toward decarbonization has made it hard to invest in oil refineries, which in the short term is putting a squeeze on supplies and prices. Fatih Birol, executive director of the International Energy Agency, told German weekly Der Spiegel that a bottleneck may emerge for products including diesel oil, gasoline and paraffin in Europe.


Riaz Haq said…
India is importing almost 3x as much fertilizer from Russia as it did pre-invasion. “Russia has emerged as the largest supplier of fertilisers to India during April-June this year… [I]mports from Russia were ‘10% cheaper’ than the prevailing prices.”

https://twitter.com/clary_co/status/1550995317864144896?s=20&t=Shlu_Mw4he67BUhCi4MaoA

In development that holds diplomatic significance and brings fiscal savings, Russia has emerged as the largest supplier of fertilisers to India during April-June (Q1, FY23) this year. India imported 7.74 lakh metric tonnes of fertilisers from Russia in the first quarter and this is more than a fifth of the total 36.4 lakh metric tonnes imported from across the globe, according to data shared by Chemicals and Fertilisers Minister Mansukh Mandaviya in a written reply to a question in Lok Sabha on Friday.

https://indianexpress.com/article/india/fertiliser-imports-from-russia-up-8048004/
Riaz Haq said…
JPMorgan says #Russia has had no problem rerouting its #oil #exports from #Europe. Expects Russian production in Q3 to be higher than a year ago. Better-than-expected global production amid signs of a drop in #demand pushing oil #prices lower. #Ukraine https://africa.businessinsider.com/markets/jpmorgan-says-russia-has-had-little-problem-rerouting-its-oil-exports-meaning-the/zsvgs2y?utm_medium=social&utm_source=twitter&utm_campaign=share-button

Russia has been able to reroute its oil exports away from Europe without serious disruptions, JPMorgan has said, adding that the expected drop in output "never happened."

Better-than-expected Russian production, along with the release of oil from global strategic reserves, helps explain the recent drop in crude prices, the bank's head of commodities research Natasha Kaneva said in a note to clients.

Russia's oil exports to Europe its biggest market have fallen relatively sharply in 2022, as companies have "self-sanctioned" in the wake of Vladimir Putin's invasion of Ukraine in late February.

However, Russia has been able to shift its exports towards Asia, with India and China in particular stepping up their purchases. More recently, a jump in domestic demand has caused Russian oil production to rise back to prewar levels.

"The market consensus was too pessimistic about Russia's capability to re-route volumes to other buyers," Kaneva and her colleagues said in the note Wednesday. "Russia's exports adjusted towards other buyers without a serious disruption to its production."


"At its peak, the oil market was pricing in the worst-case scenario a 3 million barrel a day loss of Russian production combined with record-high summer demand while, in reality, it never happened."

JPMorgan expects Russia production to produce 9.95 million barrels a day of oil in the third quarter, above the 9.76 million barrels a day produced in the same quarter a year earlier.

It thinks production will slip to 9.5 million barrels a day in 2023, staying relatively strong despite the European Union's ban on most oil imports from the country.

Oil prices have fallen in recent weeks, with global supply stronger than expected and demand likely to weaken in the coming months as the world economy slows. WTI crude, the US benchmark price, was down around 10% over the last month to trade at $98 a barrel Friday.

Russia's oil and gas revenues have helped Putin's government prop up the local currency, the ruble, alleviating some of the pressure on the economy.

However, the economy is still expected to shrink sharply this year. Imports have cratered in a sign of domestic stress.

Yale academics, led by Jeffrey Sonnenfeld, said in a study this week that Western sanctions are "catastrophically crippling" the economy, with domestic production slowing dramatically.
Riaz Haq said…
#India turns to #Russian #fertilizer, showing challenge of isolating #Moscow over #Ukraine. Imports from Russia are up sharply and come on top of record shipments to India of discounted Russian #oil. #Ukraine️war #US #Modi #energy #inflation #economy https://www.washingtonpost.com/world/2022/08/04/india-russia-fertilizer-oil-imports/?tid=ss_tw

India has dramatically increased its imports of fertilizer from Russia in recent months, demonstrating the difficulties the United States and its allies face in isolating Moscow over the invasion of Ukraine.

From April to June, India imported 7.74 million tons of Russian fertilizer, a figure representing about two-thirds of all its fertilizer imports from Russia last year, making the country India’s top supplier, according to information provided in Parliament by the minister of chemicals and fertilizers, Mansukh Mandaviya.

These shipments, including urea and nitrogen-based fertilizers, come on top of record imports of discounted Russian oil. Although Persian Gulf countries remain India’s top suppliers of crude oil, India in July bought about 1 million barrels a day from Russia, a sharp increase since the beginning of the year, according to Bloomberg News. Government data shows that India spent $3.7 billion on Russian oil between January and May, up more than 350 percent from the same period last year.

As the war in Ukraine continues, so does the challenge Western countries face in seeking to stop Russian President Vladimir Putin’s military campaign without hurting the poorest in the world. U.N. Secretary General António Guterres recently warned that vulnerable countries would be on the verge of famine without Russian food and fertilizers.

“There is no option,” agriculture expert Devinder Sharma said of India’s increased fertilizer imports from Russia. “Agricultural production will come under stress without adequate fertilizer supplies.”

Unlike oil, fertilizer is not included in the U.S. sanctions placed on Russia because of the invasion.

For India, this year’s monsoon-season rice crop is crucial after a scorching heat wave in March damaged the country’s staple wheat crop and reduced yields. With food stocks depleted and the climate uncertain, India banned wheat exports this year, saying its food security was “at risk.”

The country has shied away from joining the Western coalition arrayed against Russia, initially because of its dependence on Moscow for weaponry and now because of concerns over energy and food security.

India’s imports of Russian coal and sunflower oil also have jumped. Overall, Russia has become the 10th-largest source of imports to India, according to data from the Indian Ministry of Commerce and Industry, ranking much higher than in previous years. Through May, India imported goods worth $8.3 billion from Russia, nearly triple the value for the same period last year.
Riaz Haq said…
The (Chinese) yuan accounted for 31% of the non-US dollar payments for Russian coal in June and the Hong Kong dollar for 28%. The euro made up under a quarter and the Emirati dirham around one-sixth, the data from the trade source showed.

In June, Indian buyers paid for at least 742,000 tonnes of Russian coal using currencies other than the US dollar, according to a summary of deals compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44% of the 1.7 million of tonnes of Russian imports that month.

https://thewire.in/business/indian-companies-are-swapping-dollar-for-asian-currencies-to-buy-russian-coal-data#:~:text=In%20June%2C%20Indian%20buyers%20paid,of%20Russian%20imports%20that%20month.


Indian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoiding the US dollar and cutting the risk of breaching Western sanctions against Moscow.

Reuters previously reported on a large Indian coal deal involving the Chinese yuan, but the customs data underline how non-dollar settlements are becoming commonplace.

India has aggressively stepped up purchases of Russian oil and coal since the war in Ukraine began, helping to cushion Moscow from the effects of sanctions and allowing New Delhi to secure raw materials at discounts compared to supplies from other countries.

Russia became India’s third-largest coal supplier in July, with imports rising by over a fifth compared with June to a record 2.06 million tonnes.

In June, Indian buyers paid for at least 742,000 tonnes of Russian coal using currencies other than the US dollar, according to a summary of deals compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44% of the 1.7 million of tonnes of Russian imports that month.

Indian steelmakers and cement manufacturers have bought Russian coal using the United Arab Emirates dirham, Hong Kong dollar, yuan and euro in recent weeks, according to customs documents separately reviewed by Reuters.

The yuan accounted for 31% of the non-US dollar payments for Russian coal in June and the Hong Kong dollar for 28%. The euro made up under a quarter and the Emirati dirham around one-sixth, the data from the trade source showed.

The Ministry of Finance, which administers the customs board, did not respond to emails seeking comment confirming the documents. The Ministry of Commerce and Industry declined to comment.

The Reserve Bank of India also did not respond to requests for comment.

The RBI has approved payments for commodities in the Indian rupee, a move it expects to boost bilateral trade with Russia in its own currency.

Riaz Haq said…
#US says #India hid #Russian origin of fuel shipped to the #UnitedStates. US Treasury Dept told India that an Indian ship picked up $oil from a Russian tanker on the high seas, brought it to a port in #Gujarat where it was refined and shipped to US. #Modi https://www.reuters.com/business/energy/us-says-india-hid-russian-origin-fuel-shipped-us-india-cbank-2022-08-13/

The United States has expressed concern to India that it was being used to export fuel made from Russian crude, through high-seas transfers to hide its origin, to New York in violation of US sanctions, a top Indian central banker said on Saturday

The US Treasury Department told India that an Indian ship picked up oil from a Russian tanker on the high seas and brought it to a port in Gujarat on the west coast, where it was refined and shipped on, said Reserve Bank of India Deputy Governor Michael Patra.

US sanctions on Moscow for its February invasion of Ukraine prohibit the import to the United States of Russian-origin energy products including crude oil, refined fuels, distillates, coal and gas.

"The refined output was put back on that ship and it set sail without a destination. In the mid-seas it received the destination so it reached at its course, went to New York," Patra said at an event to celebrate 75 years of India's independence.

The US embassy in New Delhi said it had no immediate comment.

Patra's comments are India's first official public reference to such U.S. concerns. Delhi has not joined the sanctions against Russia or condemned what Moscow calls a "special military operation" in its neighbour.

Patra said he was told the Russian crude was processed and converted into a distillate used for making single-use plastic. He did not identify the Indian vessel or refiner.

"The refined output was put back on that ship and it set sail without a destination. In the mid-seas it received the destination so it reached at its course, went to New York," Patra said at an event to celebrate 75 years of India's independence.

The US embassy in New Delhi said it had no immediate comment.

Patra's comments are India's first official public reference to such U.S. concerns. Delhi has not joined the sanctions against Russia or condemned what Moscow calls a "special military operation" in its neighbour.

Patra said he was told the Russian crude was processed and converted into a distillate used for making single-use plastic. He did not identify the Indian vessel or refiner.

Riaz Haq said…
The United States has told India that an Indian ship was used earlier this year to export fuel made from Russian crude to New York through high-seas transfers, a top Indian central bank official said on Saturday.


https://www.business-standard.com/article/current-affairs/indian-ship-used-to-move-russian-linked-fuel-to-new-york-us-tells-india-122081700316_1.html#:~:text=The%20United%20States%20has%20told,bank%20official%20said%20on%20Saturday.

The U.S. Treasury Department told India that an Indian ship picked up oil from a Russian tanker on the high seas and brought it to a port in Gujarat on the west coast, where it was refined and shipped on, said Reserve Bank of India Deputy Governor Michael Patra.

U.S. sanctions on Moscow for its February invasion of Ukraine prohibit the import to the United States of Russian-origin energy products including crude oil, refined fuels, distillates, coal and gas.

"The refined output was put back on that ship and it set sail without a destination. In the mid-seas it received the destination so it reached at its course, went to New York," Patra said at an event to celebrate 75 years of India's independence.

The U.S. embassy in New Delhi said it had no immediate comment.

Patra's comments are India's first official public reference to such U.S. concerns. Delhi has not joined the sanctions against Russia or condemned what Moscow calls a "special military operation" in its neighbour.

Patra said he was told the Russian crude was processed and converted into a distillate used for making single-use plastic. He did not identify the Indian vessel or refiner.

"So that's the way war works. It works in strange ways," he said.

India, the world's number 3 oil importer and consumer rarely bought Russian oil in the past. But since the war started, Indian refiners have been snapping up discounted Russian oil, shunned by many Western countries and companies.
Riaz Haq said…
#Biden's effort to isolate #Russia has a big problem: #India. India accounted for less than 1% of Russia's #oil exports prior to the invasion, but was up to 13% by July, helping to offset Russia's lost market share in #Europe. #UkraineRussiaWar #Modi #US https://www.axios.com/2022/09/01/india-russian-oil-military-exercises

Two global powers are undercutting Western efforts to isolate Russia and deplete the Kremlin coffers as they scale up purchases of Russian oil and join Russia this week in major military exercises.

Why it matters: One of those countries is China, which has moved closer to Moscow amid its confrontation with the U.S. The other, though, is India — one of Washington's most valued partners, which has taken a neutral position on Russia's invasion of Ukraine.

How it happened: The EU was by far the top destination for Russian oil prior to February's invasion of Ukraine, but EU countries have cut back their purchases and plan to end nearly all imports of Russian oil by year's end.

Even still, Russia's oil revenues are on track to jump by 38% this year, per Reuters. Asked about that projection this week, a White House spokesperson said it had made clear to countries that this is no time for "business as usual with Russia."
For China and India, it's been far beyond business as usual — they've both dramatically increased their purchases. India accounted for less than 1% of Russia's oil exports prior to the invasion, but was up to 13% by July, helping to offset Russia's lost market share in Europe.
Yes, but: That's due not to politics, but price. Prices from the Gulf have been sky-high, Russia is selling at a discount, and India is trying to keep inflation down and recover economically from the pandemic, Tanvi Madan of Brookings tells Axios.

Indian Foreign Minister Subrahmanyam Jaishankar has called it an "obligation and moral duty" to get the lowest-possible energy prices for Indian consumers. Russia, meanwhile, has praised India for resisting Western pressure.
What to watch: To stop Russia from benefiting from the high oil prices that its invasion helped create, the White House wants to put a price cap on Russian oil. G7 finance ministers will discuss that proposal on Friday.

For it to be effective, they'll need India on board. U.S. Deputy Treasury Secretary Wally Adeyemo visited New Delhi last week and said he'd had "a very constructive conversation" with Indian officials on the cap.
India has thus far been noncommittal. It stands to benefit from lower prices, but will be wary of provoking Moscow — particularly considering its military's overwhelming reliance on Russian arms.

Zoom out: The long-standing military relationship between India and Russia is on display this week at the Vostok war games in Russia's far east, which will also include China and several other countries.

India's troops will be "full-fledged" participants, not just observers, a source briefed on the matter tells Axios. The source noted that India has taken part in similar exercises in the past but doesn't "always publicize it."
Asked about India's participation, White House press secretary Karine Jean-Pierre said the U.S. "has concerns about any country exercising with Russia while Russia wages an unprovoked, brutal war against Ukraine."
Between the lines: She avoided any direct criticism of India and dodged a follow-up as to whether the U.S. has pressured India to stop helping Russia, as it has pressured China.

The Biden administration recognizes that India's long-standing relationship with Russia won't fade away overnight, and while it's trying to help New Delhi diversify its arms supply away from Russia, the U.S. priority is deepening coordination in the Indo-Pacific, Madan says.
The bottom line: India is too important to the U.S. strategy toward one top rival, China, to push back too hard as it undermines U.S. policy toward the other.

Riaz Haq said…
As the world lurches through the growing pains of massive geopolitical change, the US’ relationship with India will increasingly take center stage. Washington likes to see itself as providing a geopolitical center of gravity that is inherently attractive to nations like India, especially against regional competitors such as China. As the US is about to discover, however, India and China have a shared ambition about who should dominate the Pacific in the coming century, and it doesn’t include the US. Op Ed by Scott Ritter

https://www.energyintel.com/00000183-21d9-d467-adc7-21fdd54f0000

On Aug. 19, India’s minister of external affairs, Subrahmanyam Jaishankar, gave a speech at a university in Thailand where he stated that relations between India and China were going through “an extremely difficult phase” and that an “Asian Century” seemed unlikely unless the two nations found a way to “join hands” and start working together.

For many observers, Jaishankar’s speech was taken as an opportunity for the US to drive a wedge between India and China, exploiting an ongoing border dispute along the Himalayan frontier to push India further into a pro-US orbit together with other Western-leaning regional powers. What these observers overlooked, however, was that the Indian minister was seeking the exact opposite from his speech, signaling that India was, in fact, interested in working with China to develop joint policies that would seek to replace US-led Western hegemony in the Pacific.

Struggle for Leadership

More than six decades ago, then-US Senator John F. Kennedy noted that there was a “struggle between India and China for the economic and political leadership of the East, for the respect of all Asia, for the opportunity to demonstrate whose way of life is the better.” The US, Kennedy argued, needed to focus on providing India the help it needed to win that struggle — even if India wasn’t asking for that help or, indeed, seeking to “win” any geopolitical contest with China.

Today, the relationships between the US, India and China have matured, with all three wrestling with complex, and often contradictory, policies that are simultaneously cooperative and confrontational. Notwithstanding this, the US continues to err on the side of helping India achieve a geopolitical “win” over China. One need only consider the Quadrilateral Security Dialogue, or “Quad,” conceived in 2007, but dormant until 2017, when it was resurrected under US leadership to bring together the US, Japan, Australia and India in an effort to create a regional counterweight to China’s growing influence.

There was a time when cooler heads cautioned against such an assertive US-led posture on a regional response to an expansive, and expanding, Chinese presence in the Indo-Pacific region. This line of thinking held that strong Indian relationships with Tokyo and Canberra should be allowed to naturally progress, independent of US regional ambitions.

These same “cool heads” argued that the US needed to be realistic in its expectations on relations between India and China, avoiding the pitfalls of Cold War-era “zero-sum game” calculations. The US should appreciate that India needed to implement a foreign policy that best met Indian needs. Moreover, they argued, a US-Indian relationship that was solely focused on China would not age well, given the transitory realities of a changing global geopolitical dynamic.

The Asian Century

The key to deciphering Jaishanker’s strategic intent in his Thailand comments lay in his use of the term “Asian Century.” This echoed the words of former Chinese reformist leader Deng Xiaoping, who, in a meeting with former Indian Prime Minister Rajiv Gandhi in 1988, declared that “in recent years people have been saying that the next century will be the century of Asia and the Pacific, as if that were sure to be the case. I disagree with this view.” Deng went on to explain that unless China and India focus their respective and collective energies on developing their economies, there could, in fact, be no “Asian Century.”


Riaz Haq said…
Narendra Modi’s Outreach to Vladimir Putin Risks Putting India in US Crosshairs - Bloomberg

https://www.bloomberg.com/news/articles/2022-09-15/modi-s-outreach-to-putin-risks-putting-india-in-us-crosshairs


Modi so far has managed to thread the needle between the two sides. But “no matter how much India wants to maintain the Russia relationship,” says @horror06 (Indrani Bagchi), “this is going to get more difficult as time goes by”


As Indian Prime Minister Narendra Modi meets Russia’s Vladimir Putin and attends a summit with China’s Xi Jinping on Friday, he’ll need to avoid looking too chummy with the US’s two top adversaries.

Modi’s face-to-face meeting with Putin will take place Friday in Uzbekistan, where a host of leaders are gathering for a summit of the Chinese-founded Shanghai Cooperation Organization, a group intended to counter the US-led global system. At that event, he’ll also rub shoulders with Xi, whom Modi hasn’t met in person since late 2019.


With Russia’s war in Ukraine in its seventh month, India has emerged as one of the biggest swing nations. The US and its allies have so far largely avoided pressuring New Delhi over its close ties with Russia, a key supplier of weapons and energy. That’s partly to keep Modi on its side against China in part through the Quad, a grouping that also includes Japan and Australia.

Modi so far has managed to thread the needle between the two sides while advancing India’s own interests. He’s sought cheaper oil and much-needed weapons, to counter Beijing’s aggression along their disputed Himalayan border and more investments from the US and its allies seeking to diversify supply chains away from China.

But whether he can keep that up is another question. The early tolerance for India’s position, along with its insistence that it would take time to unwind its deep security relationship with Russia, is beginning to run into greater resistance as the US and its allies ramp up efforts to impose a cap on the price for Russian oil to cut Putin’s income.



“India’s neutral public positioning on the invasion has raised difficult questions in Washington DC about our alignment of values and interests,” said Richard Rossow, a senior adviser on India policy at the Center for Strategic and International Studies. “Such engagements -- especially if they trigger new or expanded areas of cooperation that benefit Russia -- will further erode interest among Washington policy makers for providing India a ‘pass’ on tough sanctions decision.”

So far, the Biden administration has signaled it’s not interested in sanctioning New Delhi over its recent decision to buy the S-400 missile defense system from Russia. Turkey’s purchase of the same system deeply damaged US ties with the NATO ally.

Yet friction points are emerging. India has been pushing back on a price cap on Russian oil suggested by the US as its crude imports surged five times to cross $5 billion in the three months to the end of May.



Last week, the White House approved a $450 million package to upgrade the F-16 fighter jet fleet of India’s historic rival Pakistan -- a move New Delhi opposed.

And India also angered Japan by recently joining the Russia-led Vostok-2022 military exercises held around a group of islands known as the southern Kurils in Russia and the Northern Territories in Japan -- a territorial dispute that dates back to the end of World War II. India ended up scaling back its participation in the war games -- especially staying out of naval drills -- out of deference to Japan, but it left a mark.

One Japanese official, who asked not to be named discussing a sensitive topic, asked whether India would be comfortable if Japanese troops had participated in drills with Pakistan’s military but merely skipped exercises in the disputed region of Kashmir.
Riaz Haq said…
Narendra Modi’s Outreach to Vladimir Putin Risks Putting India in US Crosshairs - Bloomberg

https://www.bloomberg.com/news/articles/2022-09-15/modi-s-outreach-to-putin-risks-putting-india-in-us-crosshairs


India’s Foreign Ministry didn’t respond to a request for comment. Japan’s Foreign Ministry didn’t immediately respond to a request for comment made outside of office hours.

“The challenge for India is managing a declining relationship with Russia, nurturing a growing relationship with the US and securing its interests on all sides as a growing power,” said Indrani Bagchi, chief executive officer of the Ananta Aspen Centre, a research group on international relations and public policy. “No matter how much India wants to maintain the Russia relationship, this is going to get more difficult as time goes by.”



Modi appears aware of the optics toward the US. He was set to fly into Uzbekistan late on Thursday, missing an official dinner to kick off the Shanghai Cooperation Organization summit that would’ve produced plenty of photo opportunities with both Xi and Putin, according to people familiar with the situation, who asked not to be named.



India’s partners in the West will be closely watching the tone of any statements after Modi’s meeting with Putin. One particular area of interest is trade: In the first seven months this year, India’s imports from Russia stood at a little over $13 billion compared with just $2 billion a year earlier, according to Commerce Ministry figures. India’s exports to Russia dipped to $700 million in the same period compared to $950 million a year earlier.

While India’s historical connection with Russia will be tough to break, officials in New Delhi are more wary of China. The “no limits” friendship reached by Xi and Putin earlier this year also may factor into India’s long term strategic planning as tensions with China continue to simmer along their contested Himalayan border despite a recent pull-back of troops.



“Increasingly there are suggestions that Russia will largely follow China, especially after the Ukraine crisis,” said Harsh Pant, a professor of international relations at King’s College London. “And that is going to be one big part of the puzzle that India will have to solve.”

Riaz Haq said…
The big picture: The SCO is a political, economic and security organization designed to counter U.S. influence, which Beijing and Moscow founded in 2001.

https://www.axios.com/2022/09/15/xi-putin-meeting-samarkand


It comprises leaders from India and Central Asia, including Kazakhstan, which was Xi's first stop on his three-day trip to Central Asia. Indian Prime Minister Narendra Modi attended the summit as well.

-----------

China's President Xi Jinping met with Russia's leader Vladimir Putin in Samarkand, Uzbekistan, on the sidelines of the Shanghai Cooperation Organization (SCO) summit Thursday.

Why it matters: Their first in-person encounter since Russian forces launched their Feb. 24 invasion of Ukraine marks a show of diplomatic support for the Russian president after Ukrainian troops forced his forces to retreat from much of Ukraine's northeast, even as Putin acknowledged that Beijing may have "questions and concerns" regarding the war.

Xi is aiming to bolster his standing as a geopolitical statesman in his first trip outside China since early in the COVID-19 pandemic before October's Communist Party leaders' meeting, when he's expected to secure a third term in office.
What they're saying: “We highly appreciate the balanced position of our Chinese friends in connection with the Ukrainian crisis,” Putin said in his opening remarks at the meeting, the New York Times reported.

“We understand your questions and concerns in this regard. During today’s meeting, of course, we will explain in detail our position on this issue, although we have spoken about this before," he added.
Putin also referred to Xi as a “dear and longtime friend," adding that Russia supports the One China principle and condemns the U.S.' "provocations" in Taiwan, per the Washington Post.
Xi did not comment on Ukraine or the perceived threat from NATO in his remarks at the meeting.
However, China released a statement after the meeting noting that it was "ready to work with Russia in extending strong support to each other on issues concerning their respective core interests," per the Times.
Worth noting: The Kremlin claimed in a statement ahead of Putin's trip to Samarkand that a senior official from the ruling Chinese Communist Party said during a visit to Russia last week that Beijing "understands and supports Russia," in particular "on the situation in Ukraine."

The state-run Xinhua News Agency said Li Zhanshu, the third-ranking member of the CCP, met with Putin, but it did not mention comments about Ukraine. It said Li pledged to "continue to work with Russia to firmly support each other on issues concerning each other's core interests and major concerns."
The big picture: The SCO is a political, economic and security organization designed to counter U.S. influence, which Beijing and Moscow founded in 2001.


It comprises leaders from India and Central Asia, including Kazakhstan, which was Xi's first stop on his three-day trip to Central Asia. Indian Prime Minister Narendra Modi attended the summit as well.
Iran announced earlier this week it would join the SCO, underscoring the growing alignment between the U.S.'s top adversaries.
Flashback: Xi and Putin last met in early February in Beijing, where they jointly announced a "no limits" partnership and the arrival of a "new era" of global politics — just weeks before Putin's invasion of Ukraine.

The Chinese leader backed the Russian president in warning against Western "interference" and a NATO expansion — which Putin later blamed in his attempts to try and justifying his forces' unprovoked invasion of Ukraine.
Between the lines: Both Putin and Xi are now in more precarious situations than they were in February. The Russian economy is increasingly isolated by a tough Western-led sanctions regime, and the Russian army has recently suffered major setbacks in Ukraine after a successful counteroffensive by the Ukrainian military.


Riaz Haq said…
Russian President Vladimir Putin told India's Narendra Modi on Friday that he understood New Delhi's concerns about the conflict in Ukraine and wanted it to end "as soon as possible", according to a readout of a bilateral meeting published by the Kremlin.

https://news.yahoo.com/putin-tells-modi-understands-indias-142301013.html

The Indian prime minister told Putin on the sidelines of a regional security bloc summit in Uzbekistan: "I know that today's era is not an era of war, and I have spoken to you on the phone about this." He said democracy, diplomacy and dialogue kept the world together.

But Putin said Kyiv had rejected negotiations and was set on achieving its own objectives "on the battlefield".

"I know your position on the conflict in Ukraine, your concerns that you constantly express," he told Modi on the sidelines of a summit of the Shanghai Cooperation Organisation in Samarkand, Uzbekistan.


"We will do everything to stop this as soon as possible. Only, unfortunately, the opposing side, the leadership of Ukraine, announced its rejection of the negotiation process and stated that it wants to achieve its goals by military means."

Russia controls around a fifth of Ukraine after sending its armed forces into its neighbour's territory from several directions in February.

It says that what it calls a "special military operation" was necessary to prevent Ukraine being used as a platform for Western aggression, and to defend Russian-speakers.

Kyiv and its Western allies dismiss these arguments as baseless pretexts for an imperial-style war of acquisition, and have urged Russia to withdraw unconditionally.

Putin had made similar comments to Chinese leader Xi Jinping on Thursday, saying he understood Beijing's concerns about the conflict.

Russia is trying to forge closer ties with both China and India as Moscow faces isolation and onerous sanctions from the West over its invasion of Ukraine.

Both countries have stepped up their purchases of Russian energy - trading at a discount on world markets as Western countries buy less - and talked about building closer economic ties.

(Reporting by Reuters; Editing by Kevin Liffey)

Riaz Haq said…
Senators seek secondary sanctions on Russian oil purchases that could irk India, China


https://worldoil.com/news/2022/9/20/u-s-senators-seek-secondary-sanctions-on-russian-oil-purchases/

(Bloomberg) — A bipartisan pair of senators is pressing the Biden administration to use secondary sanctions to enforce a cap on the price of Russian oil.

The push comes as the US and Group of Seven nations seek to limit Russian President Vladimir Putin’s ability to fund his war in Ukraine.

Senators Chris Van Hollen, a Maryland Democrat, and Pennsylvania Republican Pat Toomey are working on legislation that would impose secondary sanctions on foreign firms that facilitate the trade of Russian oil and on countries that increase their purchases of the commodity.

The pair worked together before and co-sponsored the Senate version of the Hong Kong Autonomy Act that imposed sanctions on Chinese officials involved in the crackdown on dissent in the territory and was signed into law by Donald Trump.

“We have yet to effectively cut off funding to Putin’s war machine by diminishing Russia’s revenues from energy sales,” Van Hollen and Toomey, who are both members of the Banking Committee, said in a statement. “In order to successfully enforce the price cap, it’s clear the administration requires new authority from Congress.”

The legislation sets up a clash with the Biden administration, which has previously rejected secondary sanctions as a way to enforce the oil price cap. Biden’s team argues that the economic incentives of a cap are sufficient to induce cooperation and secondary sanctions would create tensions with nations such as India, which continue to buy Russian oil.

Buyer Incentives

“I don’t think you need secondary sanctions for this to work,” Deputy Treasury Secretary Wally Adeyemo said in a Sept/ 6 interview with Bloomberg reporters in New York. “The incentives of buyers are aligned with the incentives of the countries that are putting in place the price cap.”

A Treasury Department spokesperson declined to comment. A person familiar with the matter, who asked not to be identified discussing private deliberations, said Treasury had been briefed on the framework.

But Congress has repeatedly steered the administration toward harder-line policies on Russia since its Feb. 24 invasion. The most prominent example was when the administration, under pressure from lawmakers, reversed its opposition to cutting off some Russian banks from the SWIFT financial messaging system.

Bilateral Strains

If passed, the legislation could provoke a major fight with countries such as India and China, which have ramped up their purchases of Russian oil and have reacted coolly to the idea of a price cap. The US has been careful in its interactions with India on the price cap, pitching it as a way to negotiate lower prices from Russia but steering clear of threatening penalties for failing to join the scheme.

Under the two senators’ proposal, the US and its allies would be required to impose a cap on the price of Russian seaborne oil by March 2023. The cap would then be reduced by one-third every year until it reaches the break-even price within three years, depriving Putin of any revenue above the price of production. The president can waive the price reduction if the administration determines it would cause the global price of oil to spike.

The cap would be enforced by secondary sanctions on any firms involved in the sale or transportation of Russian oil, including banks, insurance and re-insurance companies and brokerages.

The legislation, which has not yet been introduced, would also penalize countries found to be importing Russian oil, oil products, gas and coal above their pre-war levels.

Van Hollen and Toomey said secondary sanctions would give the administration the tools it needs to “hold accountable the financial institutions supporting those countries involved in rampant war profiteering from Russian exports.”

Riaz Haq said…
#Russia becomes #India’s 2nd-largest crude #oil supplier after #SaudiArabia. India’s September imports of Russian oil rose 18.5% from August reaching 879,000 barrels per day (bpd) of #Russian oil in September 2022.
https://economictimes.indiatimes.com/industry/energy/oil-gas/russia-becomes-indias-2nd-largest-crude-supplier/articleshow/94628529.cms


India’s September imports of Russian oil rose 18.5% from August after falling for two months, making it the country’s second-largest crude supplier after Saudi Arabia, according to energy cargo tracker Vortexa. The import of 879,000 barrels per day (bpd) of Russian oil in September is the second highest in a month ever for India after June’s 933,000 bpd.

“India may consider importing more Russian crude this quarter as refiners ramp up runs to meet the seasonal rise in domestic demand an ..

Riaz Haq said…
Suhasini Haidar
@suhasinih
Russia is India's second largest oil supplier, contribution to Indian imports now 21% , up from 1% before Ukraine war

https://www.business-standard.com/article/international/russia-bounces-back-to-become-india-s-second-largest-crude-supplier-in-sep-122100100217_1.html

https://twitter.com/suhasinih/status/1577124600399659008?s=20&t=d6vjRJYgQz8UUgURupmObg

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