RUSSIA’S CRUDE OIL EXPORTS: A view shows the facility at the Yuzhnaya Ozeryevka crude oil terminal owned by the Caspian Pipeline Consortium (CPC) near the Black Sea port of Novorossiysk, Russia, October 29, 2022.
In February 2023, Russia India overtook Saudi Arabia to become the second largest exporter of crude oil in FY23 ( chart 1, Iraq retained the top spot, although the gap is narrowing rapidly. In the four-month period between November 2022 and February 2023, Russia retained the top spot, while the share of Saudi Arabia and Iraq in India’s oil imports declined sharply ( chart 2,
Chart 1 | The chart shows the share of select top countries in India’s crude oil imports for the April-February period for the last four financial years. As can be seen, Russia’s share rose from negligible proportion in previous years to second-highest in FY23.
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chart 2 , chart Shows the share of selected top countries in India’s crude oil imports in the last seven months. The data shows that Russia is pulling away from Iraq and Saudi Arabia, and is advancing by a considerable distance.
Charts 1 and 2 show the share of petroleum oil exports to India from various countries. The four digit HS code accessed was 2709 which shows data on petroleum oils and oils derived from import of Bituminous Minerals (Crude) into India from various countries.
While the increase in imports from Russia was due to increased flow of crude oil, India is also taking in other products. In FY23 (till February), 50% of India’s imports of project goods – essential input materials in infrastructure projects – were from Russia. Close to 30% of newsprint rolls, mineral/chemical fertilizers and sunflower/cotton seed oil came from Russia in FY23 ( chart 3,
Chart 3 | Chart showing India’s imports from Russia (vertical axis) and its share in India’s total imports in FY23
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According to traders, India and China have snatched the bulk of Russian oil in April at prices above the western price range of $60 a barrel. reuters Calculation. Shipping sources said oil shipments from Russia’s western ports in April would rise to 2.4 million barrels per day, the most since 2019. reuters, This means the Kremlin continues to enjoy strong revenues despite efforts by the West to curb funding for Russia’s military operations in Ukraine. A G7 source told reuters on 17 April that the western price cap would remain unchanged, despite pressure from some countries such as Poland to increase pressure on Moscow. Proponents of the cap say it reduces revenue for Russia by allowing oil to flow, but its opponents say it is too soft to force Russia to step back from its activities in Ukraine.
India and China have not agreed to abide by the price cap, but the West had hoped that the threat of sanctions could deter traders from helping those countries buy oil above the limit. India accounts for more than 70% of the grade’s marine supplies so far this month, and China accounts for about 20%. reuters Show calculations. The average discount was $13 a barrel for Ural at Indian ports and $9 for ICE Brent at Chinese ports.
But a sudden increase in oil imports meant that India’s trade deficit with Russia widened in recent years.
Chart 4 | The chart shows India’s exports to Russia (vertical axis) and its share in India’s total exports in FY23
as shown in chart 4, India exports pharma products, crustaceans, tea, coffee and some other products but of relatively small value. And hence, India’s trade deficit with Russia widens in FY23, as shown in chart 5,
Chart 5 | Chart shows India’s trade deficit with Russia in $ million
On 18 April, India and Russia agreed to resolve trade deficit and market access issues as New Delhi sought to reduce its trade imbalance with Russia. reuters It was reported in November that Russia is potentially looking to import over 500 products from India. Indian representatives in December said they shared a list of Indian products with Moscow for access to Russian markets.
Meanwhile, Russia’s richest people added $152 billion to their wealth over the past year, buoyed by high prices for natural resources and recovering from huge losses of their fortunes soon after the Ukraine war began, Forbes Russia said. Cause Also, recently Pakistan placed its first order for subsidized Russian crude oil.
Source: Import-Export Data Bank of Ministry of Commerce, Center for Monitoring Indian Economy (CMIE)
Read also: India and China bought Russian oil above ‘price cap’ in April
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