Home NewsCommodities News India’s oil imports from U.S. to rise, amid criticism for Russian purchases By Reuters

India’s oil imports from U.S. to rise, amid criticism for Russian purchases By Reuters

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India's oil imports from U.S. to rise, amid criticism for Russian purchases By Reuters



© Reuters. FILE PHOTO: A worker holds a nozzle to pump gasoline into a vehicle at a petrol station in Mumbai, India, May 21, 2018. REUTERS/Francis Mascarenhas

Sanjeev Migrani

NEW DELHI (Reuters) – India will increase its oil imports from the United States by 11 percent this year as the severely energy-strapped nation looks to get supplies from producers around the world, including Russia, which has been hit hard by sanctions, officials said on Saturday.

A surge in oil prices following Russia’s invasion of Ukraine last month could fuel inflation in India, strain public finances and hurt growth as India emerges from a pandemic-induced slowdown.

New Delhi has faced criticism from the West for its longstanding political and security ties with Moscow, with some saying doing business with Russia would help finance its war. India urged an end to violence in Ukraine but abstained from voting on Russia.

Japanese Prime Minister Fumio Kishida, who met Indian Prime Minister Narendra Modi during his visit on Saturday, said he would encourage a unified approach on Ukraine.

India buys most of its oil from the Middle East, but the U.S. has become the fourth largest source, and supplies will increase significantly this year, a government official with knowledge of the matter told Reuters.

Iraq supplies 23% of India’s oil, followed by Saudi Arabia with 18% and the United Arab Emirates with 11%. The U.S. market share in India will rise to 8 percent this year, in line with government policy, the official said, speaking on condition of anonymity.

Russia, which has been on the fringes of the Indian market, has been offering discounted oil since the February 24 invasion to soften the blow of sweeping sanctions imposed by the United States and other countries.

The country’s largest refiner, Indian Oil Corp, recently placed a tender for 3 million barrels of Russian oil, while Hindustan Oil has booked 2 million barrels for May loading.

Another government official defended the decision to buy oil from Russia, saying India welcomes competitive oil sales offers, including from Moscow, especially as global prices rise.

The second official said that European countries continue to import Russian oil and gas, and India cannot stop importing either.

Western sanctions have been ruled out to avoid any impact on energy imports from Moscow, the official said, and Russian banks that process payments for these sales remain on the SWIFT network.

Legal energy deals in India should not be politicized, the official said. “Countries that are self-sufficient in oil or importing from Russia cannot convincingly advocate restrictive trade.”

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