Russian oil for South Asia

The most significant fallout of the Russia-Ukraine war was its impact on the energy market.

On February 5, the European Union banned Russian fuels. India decided to import Russian crude oil at a 30 percent discount to strengthen its energy security. It started refining Russian oil to bolster its export to Europe. India’s export of petroleum products to the EU countries rose 20.4 percent year-on-year in April-January to 11.6 million tonnes. In January 2023, India surpassed China to emerge as the largest importer of sea-borne Russian oil, which rose by 260kbd month-on-month in December to reach 1.2mbd in January . India had stopped importing oil from Iran earlier due to US sanctions. In the context of Russia, the United States has taken a lenient view of the import . However, India has strongly defended its decision to buy oil from Russia; Pakistan has joined the game and decided to import oil from Russia in currencies of “friendly” non-western countries. Cash strapped economy of Pakistan is likely to save around $2 billion once it starts importing in April . Though for a long time, Pakistan’s desire to import oil from Russia faced political problems as former Prime Minister Imran Khan was voted out of power. The new regime led by Shabaz Sharif, which faced an imminent economic crisis, was keen on Western help to negotiate an International Monetary Fund bailout package to save itself from bankruptcy. Though it postponed buying oil from Russia, it is now seriously reconsidering its decision given the burgeoning oil import bill.