India, China purchasing more Russian oil than earlier believed, says US

One of US President Joe Biden’s economic advisers has said that India and China may have been buying more Russian oil than previously believed by the US government. He said that purchase of Russian oil by the two large countries is easing supply constraints in global markets and driving the recent oil price decline.

West Texas Intermediate lost 5.6 per cent to $103.31 a barrel, while Brent was off 5.2 per cent at $108.62.

In an interview to the Bloomberg TV on Wednesday, Cecilia Rouse, chair of Biden’s Council of Economic Advisers, said, “Right now, in particular, oil markets are rather volatile.”

“I have heard part of the explanation is that China and India are actually purchasing more of Russian oil than maybe we believe, so that there’s more supply on the market.”

With West sanctions hanging over Russia in the wake of the Ukrainian war, Vladimir Putin has been selling the Russian oil to the Asian markets at a discount amid huge demand.

At the start of 2022, some two-thirds of Russian crude was being exported to Europe, now about 50 per cent of the nation’s oil is going to Asia, according to Gazprom Neft Chief Executive Officer Alexander Dyukov.

Most of the additional oil has gone to two countries—China and India—reports the New York Times citing shipping data by Kpler, a market research firm.

China’s imports of Russian oil rose 28 per cent in May from the previous month, hitting a record high and helping Russia overtake Saudi Arabia as China’s largest supplier.

The other biggest importer of Russian oil has been India, which has gone from taking in almost no Russian oil to bringing in more than 760,000 barrels a day.

Moreover, the Indian government has asked state-owned oil companies to buy large volumes of Russian crude as prices have fallen sharply during Moscow’s war against Ukraine, The Wall Street Journal (WSJ) reported on Tuesday.

Also read | Russian oil supplies to China and India are growing noticeably, says Vladimir Putin

Indian companies have been finding ways to keep purchasing Russian oil despite the latest round of sanctions from Europe, the report said.

Also read | Can’t ‘finger point’ India, says German Envoy Lindner on Russian oil import

To boost the appeal of its oil, Russian petroleum company Rosneft has allowed traders to pay for its crude months after delivery without a letter of credit from a bank, the WSJ reported.

(With inputs from agencies)