India’s US oil imports rise amid criticism of Russian purchases

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

By Sanjeev Miglanic

NEW DELHI (Reuters) – India’s oil imports from the United States are set to rise 11% this year, officials said on Saturday as the severely energy-poor country strives to obtain supplies from producers around the world, including heavily sanctioned Russia.

The surge in oil prices following Russia’s invasion of Ukraine last month threatens to fuel Indian inflation, strain public finances and hurt growth just as it emerged from a pandemic-induced slowdown.

New Delhi has been criticized by the West for its longstanding political and security ties to Moscow, with some saying doing business with Russia will help fund the war. India has pushed for an end to violence in Ukraine but abstained against Russia.

Japanese Prime Minister Fumio Kishida, who met his Indian counterpart Narendra Modi on Saturday during a visit, said he will encourage a united approach to Ukraine.

India buys most of its oil from the Middle East, but the United States has emerged as the fourth largest source and supplies are set to increase significantly this year, a government official briefed on Reuters.

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

Russia has been a fringe player in the Indian market, but has been offering oil at a discount since the February 24 invasion to soften the blow of sweeping sanctions imposed by the United States and other countries.

Indian Oil Corp., the country’s largest refinery, recently ordered 3 million barrels of Russian oil through a tender, while Hindustan Petroleum Corp. has booked 2 million barrels for loading in May.

India welcomes competitive offers for oil sales, including from Moscow, especially when world prices have risen, said another government official, defending the decision to buy from Russia.

European countries continue to import Russian oil and gas, and India cannot be stopped from doing so, the second official said.

Western sanctions have carve-outs to prevent any impact on energy imports from Moscow, and Russian banks processing payments for these sales will remain on the SWIFT network, the official said.

The official said India’s legitimate energy transactions should not be politicized. “Countries that are self-sufficient in oil or that import themselves from Russia cannot credibly argue for restrictive trade.”

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