The top executives at the largest Russian energy firms are attending the India Energy Week summit this week, signaling that Russia and India are bolstering their energy ties now that India is a top customer of Russian oil.
Before the invasion of Ukraine, India was a small marginal buyer of Russian crude oil. After Western buyers started shunning crude from Russia, India became a top destination for Russian oil exports alongside China.
Russia is now the single-biggest oil supplier to India, having overtaken Iraq in November.
India’s imports of Russian crude oil are estimated to have hit a record high of 1.2 million barrels per day (bpd) in December, as deep discounts on Russian crude when the price cap entered into force made India the top destination for Russia’s oil.
Even after the price cap took effect, India continued to buy large volumes of discounted Russian crude and started importing some of Russia’s Arctic crude oil varieties for the first time, taking advantage of cheap Russian cargoes to meet robust demand.
In a further sign of increased energy cooperation, Rosneft’s chief executive Igor Sechin and Novatek chairman Leonid Mikhelson are attending the ongoing India Energy Week.
Sechin said at the summit that the price of Russia’s flagship Urals crude blend was no longer set by Europe but by Asia, which has become the largest export market for the Russian commodity.
“If Russian oil does not enter the European market, then there is no reference price. Reference prices will be formed where oil volumes actually go,” Sechin said, as quoted by Reuters.
India, for its part, will buy the oil it consumes from “wherever we have to” if the economics are beneficial for the country, which is the world’s third-largest crude oil importer, Indian Oil Minister Hardeep Singh Puri told CNBC on Tuesday.
“Today we feel confident that we’ll be able to use our market to source from wherever we have to, from wherever we get beneficial terms,” the minister said.