India's Oil Diplomacy
India's Oil import
India's crude oil imports are coming in from a changing mix of countries, with the top three accounting for around 60 percent of total imports. Amid the ongoing Russia-Ukraine conflict, the per barrel price of Crude oil jumped above $140, this set an alarm for the Indian government. The rise in the price of crude oil has devastating effects on the Indian Economy and its citizens, as 90 percent of crude oil demand is met through imports, which leads to a rise in inflation. Russian crude oil imports were prohibited as a result of the sanctions imposed by Western nations on Russia. In addition, the OPEC nations decided to reduce oil output, which caused the price of oil to increase, in order to make up for the economic damage caused by the COVID-19 epidemic.
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The report, which was delayed in its publication, revealed that 24 percent of all oil imports into the nation were from Russia. Prices fell below $100 a barrel due to worries of a worldwide recession. Before the Russian military offensive in Ukraine, the top three nations were different. Iraq was the leading importer, accounting for 21 percent of the oil entering India, according to data from October 2021. Saudi Arabia(16 percent) and the United Arab Emirates(UAE), with little under 10 percent each, came in second and third, respectively. After the military action, Western nations imposed sanctions on Russia in an effort to punish it and limit its ability to profit from the sale of crude oil and other energy products. Since then, a number of nations have emerged as India's primary suppliers of crude. In April 2022, 54 percent of imports came from the UAE, Iraq with 30 percent and Colombia 16 percent were the other top sources.
The Indian government made the decision to adopt a nationalist strategy in order to safeguard the economy from the energy crisis. India chose to fulfill its energy needs by purchasing inexpensive crude oil from Russia in defiance of the sanctions imposed by Europe and the US. For the first time, this occurred according to the most recent data from the organization of the petroleum exporting countries, this was the main factor in Russia becoming India's top source of crude oil imports in June (OPEC). For the first time, Indian Oil and Petrobras (Brazil's Petroleo Brasileiro SA) has signed a contract to source Brazilian oil to meet the nation's expanding energy needs. India has been eager to find other sources of crude supplies and has recently been turning towards the LAC Region due to the US-led sanctions imposed on Russian commerce in energy sources.
Now, even Iran has offered crude oil to India at discounted prices along with stakes in its oil and gas field. There was a time when Iran used to be the largest oil exporter to India, but in 2019, after former US President Donald Trump withdrew from the Iran nuclear agreement and reimposed sanctions on Iran's oil exports, India has to halt its crude oil purchases from Tehran. India stopped importing oil from India as a result of the Countering America's Adversaries Through Sanctions Act(CAATSA) being passed. It's a good opportunity for India to extract advantages from the offers to stabalize its economy and curb inflation.