Oil, other commodities at a discounted price offered by Russia
Amid the Russia-Ukraine crisis, the Russian government has offered India the chance to buy oil and other commodities at discounted prices. India has been offered oil at a steep discount of $35 per barrel on prices before the war as mounting international pressure lowers the appetite for its barrels elsewhere following the invasion of Ukraine.
Russia is seeking new markets for its oil exports as Western sanctions tighten and India has been taking advantage of discounted prices to ramp up imports from the country.
India is the world’s third-largest consumer of oil, over 80% of which is imported.
In 2021, India bought about 12 million barrels of oil from Russia, only 2% of its total imports.
India imports 80% of its oil and Russia contributes 2 to 3% of India’s oil consumption. However, with the steep rise in oil prices (an increase of 40%), the government is planning on procuring more from Russia.
Earlier, the Biden administration released some 1 million barrels of oil per day from strategic reserves for several months in a bid to calm soaring crude prices.
India has longstanding defence ties with Russia and abstained from a vote at the United Nations condemning the invasion, although the Centre has stated on various occasions that the violence should be ended.
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