India’s continued crude oil imports from Russia and subsequent increase in export of refined oil products to the European market is under the EU’s lens, as it assesses the situation to see if the ``very purpose’’ of its sanctions against Russian oil is getting defeated, European Trade Commissioner and Executive VP, Valdis Dombrovskis, has indicated.
He said the EU would be working with a number of countries to prevent sanctions and interventions against them, although it was early to give specifics since the situation was still being assessed.
“We are noting what is happening. It is creating some concerns in the EU, as it defeats the purpose of putting sanctions against Russia in the first place, which is to reduce its ability to wage war (against Ukraine). We will also be working with a number of countries to prevent sanctions and interventions,” Dombrovskis said at a select media interaction on Saturday, when asked to elaborate on his observation on India’s increased import of crude from Russia and export of refined oil products to the EU. He also indicated that concerns had been discussed with India.
“Export of oil and oil products is Russia’s biggest budget revenue source. They are using it to finance the war on Ukraine. So it is an important issue. And correspondingly, we have introduced oil embargo instructions at the EU level, and also put in place a `G7 plus’ price cap on oil,” the European Trade Commissioner said.
“We are obviously aware that there are a number of countries, including China and India, that have not joined those sanctions. Also Russia is naturally seeking alternative markets for the loss of European markets. So we are seeing new trade patterns emerge. There are developments that we are assessing. There has been a rapid increase in refined oil products imports into the EU from India…If it (new trade patterns) defeats the purpose of restrictions imposed by the EU, it needs some reflection,” he added.
The EU’s reflection on India follows a report published by Finland-based independent research organisation CREA in April this year, alleging that the country was amongst a group of ‘laundromat countries’ that have bought discounted crude oil from Russia and sold refined products to the EU after refining the oil, thereby, avoiding European sanctions against Russia. The other ‘laundromat countries’ on the list include China, Turkey, the UAE, and Singapore.
India’s crude imports from Russia jumped 14 times in FY23, rising to $31.02 billion from just $2.2 billion in the previous year. This was mainly on account of Moscow offering steep discounts to India following economic sanctions imposed on it by the West in response to its attack on Ukraine in February 2022.
Simultaneously, the export of refined products from India to the EU has increased to 7.4 million barrels in April 2023, from 1.1 million barrels in January 2022.