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Helsinki-based Centre for Research on Energy and Clean Air (CREA) has said in a report that India is among the top five countries, including China, that is purchasing cheap Russian crude oil and converting it into refined petroleum products, which are “laundered” in Europe and G7 countries.
“We call these five countries that have increased purchases of Russian oil and ‘launder’ it into products shipped to countries having sanctioned Russian oil the ‘laundromat’ countries,” CREA report said.
The ‘laundromat countries’ are China, India, Turkey, the UAE and Singapore. The price-cap coalition countries include the European Union, G7 countries, Australia and Japan, it added.
The report explained that Russia is forced to offer discounted oil to ensure it is able to find buyers, the laundromat countries are refining larger volumes of imported Russian crude to then export refined products to sanction imposing countries (+10 million tonnes or +26 per cent of refined oil products exported to price cap coalition countries one year post invasion compared to the prior 12 months).
This is currently a legal way of exporting oil products to countries that are imposing sanctions on Russia as the product origin has been changed. This process provides funds to Putin’s war chest.
The Ministry of Petroleum & Natural Gas (MoPNG) did not respond to the report till the time of going to the press.
Private Indian refiners
The CREA report has also pointed out that Sikka and Vadinar ports in India are among the top ports that are importing Russian crude oil and exporting refined petroleum products to Europe.
The report claims that Sikka port, which serves RIL’s Jamnagar refinery, is the biggest oil product export port to the price-cap coalition countries, and the largest importing port in the world of seaborne crude oil from Russia.
It also claims that the Vadinar port is of great value to the Russian oil industry, especially Rosneft. The Vadinar oil refinery, owned by Nayara Energy, is located near the port, and Rosneft possesses a 49.13 per cent share of Nayara Energy. This situation where a Russian company owns an oil refinery in a third country highlights a possible way of circumventing sanctions.
Reliance Industries and Nayara Energy also did not respond to the findings of the report till the time of going to the press.
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