Russia offers more oil to India. Will it result in lower petrol prices for the country?

Russia offers more oil to India. Will it result in lower petrol prices for the country?

Will India benefit from the sanctions placed on Russia by several countries in various sectors? Russian Deputy Prime Minister Alexander Novak conveyed to Petroleum Minister Hardeep Puri on Friday that, despite western sanctions and a ban on fuel exports to the US, Russia is eager to increase its oil and petroleum product exports to India, as well as India's investments in the Russian oil sector.

Mr. Puri discussed the possibility of strengthening the India-Russia strategic relationship in the energy sector with Mr. Novak, who was also the previous Energy Minister, according to a Russian government statement.

The conversation between Mr. Puri and Mr. Novak is expected to fuel speculation that India could buy more oil from Russia, and brave censure from western governments, who have already expressed unhappiness on India’s decision to abstain from at least seven votes at the UN Security Council, General Assembly, Human Rights Council and International Atomic Energy Agency (IAEA) on resolutions that were critical of Russia’s actions.

"Russia's oil and petroleum product exports to India have approached $1 billion, and there are clear opportunities to increase this figure," according to a statement released in Moscow about the phone call, which discussed "current and potential joint projects in the fuel and energy industry, as well as the fact that current projects are being implemented steadily."

According to the statement, Mr. Novak stated, "We are interested in attracting more Indian investment into the Russian oil and gas sector and developing Russian enterprises' sales networks in India." According to reports, the Ministers decided to allow officials to discuss the proposals, including payment options.

The United States announced a complete ban on the import of any Russian petroleum products beginning on March 8. A sharp spike in oil prices followed the decision. Prices reached $139 per barrel at one point, and remain over $100 per barrel, causing a global inflation scare.

As a result, Russia is left with unsold reserves if new buyers are not found, as it has lost about 7,00,000 barrels of oil per day to U.S. imports and may also see a decline in current European imports of 4.5 million barrels per day.

Since Russia began military activities in Ukraine, the price of crude oil has been on the rise in the worldwide market. Brent Crude Futures hit a new high of $139 per barrel on February 7, the most since 2008. On Wednesday, though, it was re-contracted at $124 per barrel.

Finance Minister Nirmala Sitharaman reportedly told the media this week that Russia had made a "open offer" to sell crude oil to India at a reduced price, but that the government's final decision would be based on a number of factors, including transportation routes, payment channels, and insurance costs for the shipments.

A choice to buy more oil from Russia would have to be balanced against the negative reaction from India's American and European allies, who seek to economically "isolate" Russia. Last month, External Affairs Minister S. Jaishankar stated that India does not implement "unilateral sanctions," but in 2019, India agreed to "zero out" all oil imports from Iran in response to US requests.

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