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Russian state-owned oil firm Rosneft has signed a deal worth $13bn (£10bn) a year selling oil to Indian refiner Reliance in a blow to sanctions against Vladimir Putin’s government.
The 10-year deal is for the supply of 500,000 barrels of oil per day, or about 0.5 per cent of the world’s supply, according to the Reuters news agency.
Western nations have been cracking down on the purchase of Mr Putin’s oil and gas in an effort to choke off Russia’s economy as the country’s attack on Ukraine drags on.
Nigel Gould-Davies, senior fellow for Russia and Eurasia at the International Institute for Strategic Studies think tank said: “This is significant in the wider context of Western sanctions policy.
“The huge rise in Indian oil imports from Russia since 2022 has led to the re-export of large quantities of oil products to the EU, thereby effectively breaching the EU embargo on Russian oil.”
“The new deal is also going ahead as the G7 sanctions coalition is looking at ways to enforce its global price cap on Russian oil more effectively. Secondary sanctions on Russian oil sales are growing, including on Russia’s "shadow fleet" that now transports nearly all its oil exports.”
India, China and other nations have made use of the sanctions to buy cheap oil and gas from Russia.
A report earlier this month from the Centre for the Study of Democracy, another think tank, suggested that this year the EU bought 20 per cent more oil from Indian refineries that are known to buy Russian oil than a year ago.
The EU has tried to impose a price cap of $60 (£47) a barrel for Russian oil and ban direct imports, but buying refined products like petrol and diesel from intermediaries like India is not against their rules.
Brent crude trades at $72.62 (£57) per barrel by comparison.
Russia has also made use of other loopholes to obtain products it has been banned from buying. British-made cars have found their way into Russia by being bought by neighbours such as Azerbaijan, according to reporting by Sky News.
Russia also reportedly buys US computer chips via China.
But there are signs Russia’s economy is suffering. Inflation is running at 8.9 per cent, way above Moscow’s target of 4 per cent, and borrowing costs are the highest in 20 years.
The rouble fell to its lowest value compared to the dollar in more than two years last month, although a weak rouble means that oil sold in dollars is worth more local currency.
Austria’s government-controlled energy company OMV terminated its gas deal with Russia’s Gazprom this week.
Austria, a rare non-Nato member of the EU, has historically been less hostile to Russia than many other European countries.
"Gazprom did not abide by the contracts, which is why OMV is immediately terminating the contract," Austrian Chancellor Karl Nehammer said on X.
"Our energy supply is secured because we are well prepared. Austria will not be blackmailed by Russia," Nehammer added.
humtum6767 on December 15th, 2024 at 05:46 UTC »
Turkey a NATO ally buys tons of oil from Russia. India has to buy cheapest oil possible which is currently Russian.
AdEmbarrassed3566 on December 15th, 2024 at 05:01 UTC »
This phrasing is so beyond flawed...
This isn't a blow to western sanctions.....this is completely by design.
Western countries still need access to Russian natural resources. If that access is blocked, there will.ne a spike in global prices.
Western powers would rather profits go to India than Russia. India ( and other countries ) are fulfilling that role
Articles like this constantly are framed in such a way as to make countries such as India's the perceived villain. It's absurd....they're playing the role western countries want them to play and obviously obtain a personal benefit to their own people as well.
That's a good deal for all parties...
Termsandconditionsch on December 15th, 2024 at 04:43 UTC »
Ok but at what price? I doubt that India is doing this out of kindness. If Brent is at $67 per barrel at the moment as per the article they are probably not paying much more than the $60 cap which can’t be that profitable for Russia.