New Delhi: Huge discounts on crude oil have been offered to India by Russian oil companies in an effort to lure New Delhi. India is pondering over this offer as there are various factors at play that needs to be taken into account.
Finance Minister Nirmala Sitharaman, on March 9, said that the import of Russian oil to India will depend on a "whole lot of factors."
The Finance Minister added that Russia contacted India to offer surplus oil at a discounted price over the last two to three days.
She further went on to say that the insurance costs of Russian consignments will offset any gains from not purchasing costlier crude from other countries if India agrees to import Russian oil.
At a time when global crude prices have skyrocketed to their highest levels since 2008, discounted oil is definitely a blessing for India's economy. However, the problem lies in the harsh sanctions imposed by the West on Russia and it is likely to make it difficult for India to accept Moscow's proposal.
This is a very tricky situation for India and it seems as if, New Delhi is walking on a tight rope.
The oil market also happens to be very volatile at the moment with uncertainty looming large. Many have feared that the crude prices could go up north even further and could cost as high as $150 per barrel.
This volatility is partly fueled by the ongoing round of sanctions slapped against Russia by the Western powers. US President Joe Biden had decided to ban the import of Russian Oil into America on March 8 in an effort to bleed the Russian Energy sector.
In retaliation, Moscow threatened to cut off their gas supply to Europe. It is worth noting that Europe is heavily reliant on Russian gas and imports nearly 40 per cent of its gas supply from Russia.
Meanwhile, the full-fledged war between Russia and Ukraine has led to a crisis scenario over the import of sunflower oil. Ukraine happens to be one of the leading exporters of sunflower oil and India imports it in bulk.
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