Sunday, June 26, 2022

Modi's India Busting Western Sanctions, Funding Russia's War On Ukraine

India, a western ally, is openly buying Russian coal, oil and weapons worth tens of billions of dollars at deep discounts. These actions amount to busting western sanctions and financing President Vladimir Putin's war on Ukraine. Many smaller developing countries, including Bangladesh and Pakistan, are abiding by these sanctions and suffering from the consequences in terms of high prices of fuel and food. Why these double standards? Do these policy contractions serve the broader US interests in the Asia region? 

India's Russian Imports Soaring Since the Start of Ukraine War. Source: Reuters

India's Russian coal imports are up 6-fold from May 27 to June 15, 2022, according to Reuters. Delhi's Russian oil buying has jumped 31-fold in this period.  Bulk shipments of Russian thermal coal to India began in the third week of May, 2022. 

India is defying western sanctions to buy millions of barrels of discounted Russian crude oil, hiding their origin and exporting refined petroleum products with a big markup to make a huge profit. China has yet to increase its oil imports from Russia, according to news reports. Meanwhile, India's neighbors Bangladesh and Pakistan are abiding by western sanctions and paying much higher market prices to buy oil for their domestic needs, and hurting their people. Such double standards are not going unnoticed. 

India's Refined Petroleum Exports.Source: MarketWatch

India is importing large amounts of deeply discounted Russian crude, running its refiners well above capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe, according to MarketWatch.  “As the EU weans from Russian refined products, we have a growing suspicion that India is becoming the de facto refining hub for Europe,” said Michael Tran, global energy strategist at RBC Capital Markets, in a Tuesday note. Here’s how the puzzle pieces fit together, according to Tran:

"India is buying record amounts of severely discounted Russian crude, running its refiners above nameplate capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe. In short, the EU policy of tightening the screws on Russia is a policy win, but the unintended consequence is that Europe is effectively importing inflation to its own citizens. This is not only an economic boon for India, but it also serves as an accelerator for India’s place in the new geopolitically rewritten oil trade map. What we mean is that the EU policy effectively makes India an increasingly vital energy source for Europe. This was historically never the case, and it is why Indian product exports have been clocking in at all-time-high levels over recent months". 

Bangladesh and Pakistan are afraid to buy Russian oil for fear of western sanctions while American ally India feels free to do so.  Pakistan's Imran Khan sought to buy Russian oil and gas before he was removed from power in early April. Pakistani Finance Minister Miftah Ismail told CNN's Becky Anderson in a recent interview, “It is very difficult for me to imagine buying Russian oil. At this point I think that it would not be possible for Pakistani banks to open LCs or arrange to buy Russian oil". Similarly, Bangladeshi foreign minister AK Abdul Momen said, “Russia has offered to sell oil and wheat to us, but we can’t do it out of fears of sanctions. We asked [India] how they did it [import oil from Russia]. They [India] said they have found some tricks,” Momen added. 

The West, particularly the United States, is turning a blind eye to India's actions when it comes to busting sanctions on Russia. Indian Prime Minister Narendra Modi is openly funding the war in Ukraine by buying weapons and energy from Russia. At the same time, India's smaller neighbors feel intimidated by the threat of western sanctions if they follow Modi's example. Such double standards are not going unnoticed. 

Related Links:

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South Asia Investor Review

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Pakistani-Ukrainian Billionaire Zahoor Sees "Ukraine as Russia's Afghanistan"

Ukraine Resists Russia Alone: A Tale of West's Broken Promises

Ukraine's Lesson For Pakistan: Never Give Up Nuclear Weapons

Can the Chinese Yuan Replace the US Dollar?

Russia Sanction: India Profiting From Selling Russian Oil

Ukraine's Muslim Billionaire Akhmetov Holds Balance of Power

Ukraine's Muslims Oppose Russia


Anonymous said...

India is not violating any law.Its government is looking after its own interests. Pakistani government is a slave of the US/UK with leaders having large personal assets in the jurisdiction of these countries.These are facts that can't be wished away. All independent countries are buying Russian oil China India Vietnam etc.The west has no grounds to object, certainly not moral after it unilaterally bombed Serbia,Iraq ,Libya, Syria etc.

Shams said...

Yeah Riaz, Modi is buying for cash all that discounted Russian oil while Punjabistan is arm-farting their success in getting a "bheek" of $6b from IMF.

Riaz Haq said...

Shams: "Modi is buying for cash all that discounted Russian oil while Punjabistan is arm-farting their success in getting a "bheek" of $6b from IMF"

You are full of sh-- as usual.

Pakistan is paying a lot more CASH per barrel for its oil purchases from non-Russian sources! So is Bangladesh!!

The US needs to either crack down on Modi or also exempt Bangladesh and Pakistan from western sanctions!!!

Riaz Haq said...

#Europe, #US, #G7 court #India to join efforts to punish #Russia. #Biden views India as too essential a partner to contain #China to seriously consider sanctioning India for increasing its trade with Russia. #ModiInGermany #Modi #Ukraine

As Ukraine’s allies seek to broaden the coalition of nations against Russia, the United States and Europe are working to persuade India to abandon its neutral stance in the war in Ukraine.

Prime Minister Narendra Modi on Monday will join the Group of 7 summit in Germany, where Ukraine has been the focus. So far, U.S. overtures to persuade Mr. Modi to stop buying Russian oil have failed. Its purchases of Russian crude have doubled since the conflict’s start.

Four other nations with close relations to Russia — Argentina, Indonesia, Senegal and South Africa — were also invited to the summit.

Mr. Modi has maintained a neutral stance on the war, calling for a resolution through diplomacy and dialogue. But India’s increasing trade with Russia has undercut U.S.-led efforts to starve the Kremlin of oil revenue.

Political observers say that the Biden administration probably views India as too essential a partner in its plans to contain China for it to seriously consider sanctioning India for increasing its trade with Russia.

Mr. Modi is scheduled to participate in sessions on climate, energy, health, food security and gender equality. During the summit, President Biden announced plans for an infrastructure fund, with G7 countries putting up billions of dollars for development projects in India and elsewhere as a counterweight to China’s expansive Belt and Road Initiative.

The meeting at Schloss Elmau, a retreat in the Bavarian Alps, comes amid a worsening situation in Ukraine that has not only set off a geopolitical crisis, but also challenged energy and food security, particularly in developing countries.

While the U.S. and Europe are working to reduce their dependence on Russian energy, India and China have drastically increased their purchases, taking advantage of crude discounts of $30 per barrel.

When he was re-elected in 2019, Mr. Modi promised to double the size of India’s economy by 2024. His government said India’s growth depends upon reliable and affordable fuel supplies, and that sanctions on Iranian oil have left India with few other options.

As India increases its purchases of Russian oil, Europe has continued to buy the majority of Russian natural gas exported in recent months. Indian officials have criticized what they characterize as the hypocrisy of the West.

“Punishing India for getting a good deal, and doing it legally, is not on their immediate agenda,” said Samir N. Kapadia of the Vogel Group consultancy in Washington.

“However,” he added, “I don’t believe these record import levels will go unnoticed.”

samir sardana said...


Like I said on May 15, 2022 at 6:43 AM,on






Rk singh said...

Riaz Bhai, just because you are from USA, can you claim USA is right on Ukraine? USA made such a hue and cry during "Bay of Pigs" incident0 when a nuclear arsenal was supposed to be stationed in Cuba. Similar thing was being planned by USA in Ukraine.

I agree the loss of life on both sides is tragic. But Ukraine crisis is the result of provocation from Zelensky.

Russia has been our friend from 1947. We cannot abandon its friendship- to support ulterior motives of its enemies. We consider China a bigger threat to humanity than Russia. Right now, China is buying more oil than India.

Z Bukhari said...

As per my sources China has offered a good deal on Russian oil for Pakistan..Deferred payment agreement is being sorted out.. Establishment is also evaluating other possibility. Agencies have been tasked to find ways to transfer oil in high seas and avoid affiliation.. Trust our agencies they are doing the job.

Riaz Haq said...

Dr. Audrey Truschke
I understand the diplomatic reasons for saying this. But the unvarnished reality is that India is a weak partner for the US, and it’s becoming weaker by the day. #USIndia
Quote Tweet
Secretary Antony Blinken

United States government official
· 10h
Met with India’s @DrSJaishankar at the @G7 Summit to underscore the importance of #USIndia cooperation. As strong partners, we’ll continue working closely to address global economic challenges and strengthen security, prosperity and clean energy in the Indo-Pacific.

Riaz Haq said...

#India’s crude #oil imports from #Russia jumps 50 times; now accounts for 10% of all import. Russia surpassed #SaudiArabia to become India’s second-biggest oil supplier behind Iraq as refiners crowded Russian crude oil that is available at a deep discount

Russia has now emerged among the top 10 suppliers of crude oil to India. From all the crude oil purchases from overseas, India’s imports from Russia have climbed more than 50 times since April.

With that, Russian oil imports now account for 10% of India’s total crude imports basket. Prior to the Ukraine war, Russian imports were just 0.2% of all the oil imported by India.

An official told reporters, that Russian oil now makes up 10 percent of India’s oil import basket in April. It is now among the top 10 suppliers, as reported by PTI.

Notably, about 40% of Russian oil has been bought by private refiners namely Reliance Industries and Rosneft-backed Nayara Energy.

In May, Indian refiners purchased approximately 25 million barrels of crude oil from Russia.

Also, last month, Russia surpassed Saudi Arabia in becoming India’s second-biggest oil supplier behind Iraq as refiners crowded Russian crude oil that is available at a deep discount in a multi-year high Brent crude and US WTI scenario following the Kremlin’s invasion of Ukraine.

Saudi Arabia is now the third-largest crude oil supplier for India.

India is the third-largest oil consumer in the world with 85% of which is imported, after China and the US.

Due to the conflict with Ukraine, there have been fewer buyers for Russian Ural crude oil as some foreign governments and companies have exited the country’s energy exports which led to a decline in the price.

As per the report, Indian refiners have taken advantage of this and purchased Russian crude oil at discount as high as $30 per barrel.

India has continuously defended its decision for crude oil purchases from Russia even when major western economies issued several sanctions on President Vladimir Putin-led country condemning their invasion of Ukraine.

On May 4, in a press statement, the Ministry of Petroleum & Natural Gas said India’s India’s energy needs are enormous with daily consumption of around 5 million barrels and a refining capacity of 250 MMTPA. For energy security and to fulfill its objective of providing energy justice to each of its citizens, Indian Energy companies buy from all major oil producers in the World. On average, India has the unique distinction of servicing 60 million visitors at its petrol pumps every single day. Despite challenging times, it is important for the Government to ensure access to affordable energy for our citizens.

According to the ministry, India’s top 10 import destinations are mostly from West Asia. In the recent past, the USA has become a major crude oil source for India, supplying almost $13 bn worth of energy imports, with almost 7.3% of the market share of crude oil imports.

The ministry had explained that Indian Energy companies have been sourcing energy supplies from Russia, on a sustained basis, over the past several years. Yearly figures may have varied due to a variety of reasons, including operational necessities. If suddenly, now, as a huge importer of crude oil, India pulls back on its diversified sources, concentrating on the remaining, in an already constrained market, it will lead to further volatility and instability, jacking up international prices.

“Despite attempts to portray it otherwise, energy purchases from Russia remain minuscule in comparison to India’s total consumption,” the ministry had said.
Source: Livemint

Riaz Haq said...

Suhasini Haidar
How imports of Russian oil have soared: DataPoint

Riaz Haq said...

#India's Top Cement Maker Paying for #Russian #Coal in #Chinese #Yuan. India tried setting up an #INR payment mechanism for #trade with Russia, but that has not materialized. Chinese businesses have used the yuan in trade settlements with Russia for years

India's biggest cement producer, UltraTech Cement, is importing a cargo of Russian coal and paying using Chinese yuan, according to an Indian customs document reviewed by Reuters, a rare payment method that traders say could become more common.

UltraTech is bringing in 157,000 tonnes of coal from Russian producer SUEK that loaded on the bulk carrier MV Mangas from the Russian Far East port of Vanino, the document showed. It cites an invoice dated June 5 that values the cargo at 172,652,900 yuan ($25.81 million).

Two trade sources familiar with the matter said the cargo's sale was arranged by SUEK's Dubai-based unit, adding that other companies have also placed orders for Russian coal using yuan payments.

The increasing use of the yuan to settle payments could help insulate Moscow from the effects of western sanctions imposed on Russia over its invasion of Ukraine and bolster Beijing's push to further internationalise the currency and chip away at the dominance of the U.S. dollar in global trade.

The sources declined to be identified as they are not authorized to speak to the media. UltraTech and SUEK did not respond to a request seeking comment.

"This move is significant. I have never heard any Indian entity paying in yuan for international trade in the last 25 years of my career. This is basically circumventing the USD (U.S. dollar)," a Singapore-based currency trader said.

The sale highlights how India has maintained trade ties with Russia for commodities such as oil and coal despite the western sanctions. India has longstanding political and security ties with Russia and has refrained from condemning the attack in Ukraine, which Russia says is a "special military operation".

It was not immediately clear which bank opened a letter of credit for UltraTech and how the transaction with SUEK was executed. SUEK did not respond to a request seeking comment.

India has explored setting up a rupee payment mechanism for trade with Russia, but that has not materialized. Chinese businesses have used the yuan in trade settlements with Russia for years.

For Indian trade settlements using the yuan, lenders would potentially have to send dollars to branches in China or Hong Kong, or Chinese banks they have tie-ups with, in exchange for yuan to settle the trade, two senior Indian bankers said.

"If the rupee-yuan-rouble route turns out to be favourable, the businesses have every reason and incentive to switch over. This is likely to happen more," said Subash Chandra Garg, a former economic affairs secretary at India's finance ministry.

India's bilateral trade with China, for which companies largely pay in dollars, has flourished even after a deadly military clash between the two in 2020, though New Delhi has increased scrutiny on Chinese investments and imports, and banned some mobile apps over security concerns.

An Indian government official familiar with the matter said the government was aware of payments in yuan.

"The use of the yuan to settle payments for imports from countries other than China was rare until now, and could increase due to sanctions on Russia," the official said.

Business units of Russian coal traders in Dubai have become active hubs for facilitating deals with India in the recent weeks, as Singapore has grown wary of provoking western nations that invoked sanctions against Russia, said multiple coal traders based in Russia, Singapore, India and Dubai.

M Azhar said...

Highlights from Yang Jiechi's visit. Will be declared once he is back in China and consultations are complete.. Worlds first overseas Yuan clearing center (after Hong Kong) to be based in Pakistan (location under discussion)..Visa free entry to all Pakistani nationals (with TSA like pre-clearance).. Currency swap agreements..Sister city arrangements..Loan waiver for a reset on economy..

More coming.. watch this space..

Anonymous said...

UPI is launching in France soon.Google has requested UPI like function by the US government / FeD reserve in a Senate committee hearing.

I won’t exaggerate Indian payment infrastructure is among the best in the world and dirt cheap not even 1% transaction charge of US equivalent.

Btw try reading up on Ondc.It’s the e commerce disruption like UPI disrupted payments space.

Anonymous said...

Yup Google Pay whatsapp payments and 50 + other payment apps run on UPI in India.Customer pays nothing merchants pay less than 1 cent per transaction!!

Seriously great work by the RBI.

Anonymous said...

Abhi toh party shuru hui hain..ONDC is going to disrupt ALL e commerce monopolies/ duopolies.Its been live for less than a month and across India already 500 uber like services have sprouted up. Uber has quietly cut rates by 30-50% in India despite the rise in petrol and gas prices(I use it everyday so I can voutch for this)..this is gonna be huge and once the concept is proven every major country will launch its variant of ONDC.

Riaz Haq said...


Additionally, Western partners are only slowly overcoming their reticence to share sensitive defense technology with a non-NATO ally. For instance, U.S. efforts to co-produce the javelin missile with India under the Defense Technology and Trade Initiative failed in 2010 due to American reservations over intellectual property. However, Lockheed Martin has recently signed a Memorandum of Understanding with an Indian Company Bharat Dynamics to revive this process, indicating a newfound readiness to share technology with India. But whether Lockheed Martin’s agreement with Bharat Dynamics will bear fruit and become a precedent for defense trade more generally remains to be seen. The United States and its allies certainly “can offer India more — diplomatically, financially, and militarily — than can Russia.” But the West will need to match the tenor and nature of India’s defense ties with Russia to do so. In any case, defense exports represent a limited opportunity to positively affect India’s security preferences.

Collective Security in the Indo-Pacific

The West can also engage India while respecting its desire for autonomy by continuing to integrate it into loose or minilateral security arrangements such as the Quad. New Delhi has shown that it is unwilling to declare China an enemy or join a NATO-like security arrangement. However, its participation in a growing number of joint military exercises in the Indian Ocean region shows that India is prepared to join Western countries in protecting its maritime interests.

In this narrower geographical scope, where its interests are more closely affected, New Delhi can help Western partners protect important maritime chokepoints. In case of a war with China, India is unlikely to send ships to the Taiwan strait. However, India and the United States have had a logistics agreement in place since 2017 that has facilitated the refueling of ships and tankers. Partnership with India can also provide Western states access to the Indian Ocean Region, where New Delhi now welcomes involvement from extra-regional powers to offset China. Historically, India has sought to deny great powers access to its neighborhood. However, as New Delhi finally confronts its inability to match China’s maritime strengths and economic heft, this is beginning to change. Japan and India are already collaborating to counter Chinese influence in Sri Lanka — similar models could bring this form of cooperation to other parts of the Indo-Pacific.

Opportunities for strategic collaboration also exist along India’s 2100-mile-long disputed border with China. Any Western strategy of containment should seek to bolster India’s standing here. Not only is stopping the Chinese from changing the status quo on the Sino-Indian border important to upholding the norm of territorial sovereignty generally, but the prospect of a two-front war would also deter Chinese adventurism across the Taiwan Strait. Indo-U.S. forces will carry out joint defense exercises in Alaska later this year to increase “jointness, interoperability, and coalition interoperability.” Similar efforts to help India counter China’s infrastructure upgrades and growing military capacity in the Tibetan plateau would simultaneously enhance the Indo-U.S. partnership and strengthen U.S. containment.

Riaz Haq said...


The program for Indo-Pacific Maritime Domain Awareness announced at the Quad leaders’ May 2022 meeting is an important step toward further cooperation. It seeks to provide a “near-real-time, integrated, and cost-effective maritime domain awareness picture” in order to allow Quad members and partners to “fully monitor the waters on their shores and, in turn, to uphold a free and open Indo-Pacific.” The initiative is likely to support greater transparency in the region and shine a light on illegal Chinese fishing as well as aggressive naval expansion. As Zack Cooper and Gregory Poling wrote for War on the Rocks, the “maritime domain awareness initiative combines public goods provision with the Quad’s natural strengths: security cooperation and capacity building”.

However, New Delhi still worries that the initiative reflects Washington’s Pacific-focused vision of the Indo-Pacific, rather than India’s concern with the Western Indian Ocean. Additionally, while India is prepared to work with the United States, it is hesitant about having this cooperation described in overly securitized or anti-Chinese terms. For instance, Gen. Charles Flynn, Commander of the U.S. Pacific Army, said that India could become a useful military “counterweight” to China in the region. U.S. State Department Secretary for South and Central Asia, Donald Lu, in a recent interview suggested that India becoming a “global security power” was “in the interest of the United States”. He further described his vision of India being “militarily ready … to project that power far beyond India’s borders” in defense of the “common view of the security of Asia.” U.S. National Security Advisor Jake Sullivan has said that the United States is playing the “long game” with India and would judge it “over the fullness of time.” Such comments by American diplomats and military officials continue to suggest an inevitable alignment of Western security interests with India rather than reflecting India’s own desire for autonomy.

Trade and Supply Chain Resilience

Since the United States is already one of India’s largest trading partners, strengthening relations on this front is a productive avenue for India-U.S. engagement. India has favored an “Act East Policy” to build closer economic ties with the Association of Southeast Asian Nations and other important Southeast Asian countries. Its withdrawal from Regional Comprehensive Economic Partnership, however, shows that this approach has failed. India has, however, recently abandoned its earlier skepticism toward free trade agreements and begun tilting Westward in its trade ties. India is currently negotiating bilateral free trade agreements with the United Kingdom, the European Union, Australia, Canada, and the United Arab Emirates. Throughout these negotiations, India has also been more willing to align its domestic industry standards to global benchmarks on compliance, transparency, market access, labor, and the environment. The rhetoric of self-sufficiency notwithstanding, economic partnership with the West now has unprecedented support in New Delhi.

Riaz Haq said...



The war in Ukraine has shown that, when it comes to India’s ties with the West, a revision of expectations is overdue. India’s importance for maintaining the balance of power in the Indo-Pacific makes it impossible to overlook as a partner. Additionally, despite underperforming over the last decade due to global headwinds, India is expected to be the world’s fastest-growing big economy this year. As a result, Western partners should focus on those aspects of trade and continental and maritime security where shared interests offer a strong foundation for cooperation, rather than hope India will continue on a mythical, teleological journey toward becoming Japan. India can be expected to tacitly help balance China’s rise. But it is likely to collaborate with its Western partners as a global swing state, in ways that align with its own geographic and security concerns.

Riaz Haq said...

#SaudiArabia doubles #Russian oil imports at discounted prices for #power generation for #summer cooling demand and free up the kingdoms own crude for #export. Rising #oil sales to Saudi Arabia show #Biden's challenge in isolating Russia for #UkraineWar

Saudi Arabia, the world’s largest oil exporter, more than doubled the amount of Russian fuel oil it imported in the second quarter to feed power stations to meet summer cooling demand and free up the kingdoms own crude for export, data showed and traders said.

Russia has been selling fuel at discounted prices after international sanctions over its invasion of Ukraine left it with fewer buyers. Moscow calls the war in Ukraine a “special military operation”.

The increased sales of fuel oil, used in power generation, to Saudi Arabia show the challenge that US President Joe Biden faces as his administration seeks to isolate Russia and cut its energy export revenues.

While many countries have banned or discouraged purchases from Russia, China, India and several African and Middle Eastern nations have increased imports.

Biden was on Friday visiting Saudi Arabia and was expected to seek an increase in oil supply to global markets from the kingdom to help to lower oil prices that have aggravated inflation worldwide.

There is little spare capacity for Saudi and others to increase production in the short term. Saudi Arabia has also maintained its cooperation with Russia in the alliance of global producers known as Opec+. The two are the de facto leaders of respectively Opec and non-Opec producers in that group.

Data obtained by Reuters through Refinitiv Eikon ship tracking showed Saudi Arabia imported 647,000 tonnes (48,000 barrels per day) of fuel oil from Russia via Russian and Estonian ports in April-June this year. That was up from 320,000 tonnes in the same period a year ago.

For the full year 2021, Saudi Arabia imported 1.05 million tonnes of Russian fuel oil.

Saudi Arabian and Russian energy ministries declined to comment on the increased imports.

Anonymous said...

Now modi is busting sanctions. In short time, sanctions will be busting modi.

Riaz Haq said...

India is importing almost 3x as much fertilizer from Russia as it did pre-invasion. “Russia has emerged as the largest supplier of fertilisers to India during April-June this year… [I]mports from Russia were ‘10% cheaper’ than the prevailing prices.”

In development that holds diplomatic significance and brings fiscal savings, Russia has emerged as the largest supplier of fertilisers to India during April-June (Q1, FY23) this year. India imported 7.74 lakh metric tonnes of fertilisers from Russia in the first quarter and this is more than a fifth of the total 36.4 lakh metric tonnes imported from across the globe, according to data shared by Chemicals and Fertilisers Minister Mansukh Mandaviya in a written reply to a question in Lok Sabha on Friday.

Riaz Haq said...

JPMorgan says #Russia has had no problem rerouting its #oil #exports from #Europe. Expects Russian production in Q3 to be higher than a year ago. Better-than-expected global production amid signs of a drop in #demand pushing oil #prices lower. #Ukraine

Russia has been able to reroute its oil exports away from Europe without serious disruptions, JPMorgan has said, adding that the expected drop in output "never happened."

Better-than-expected Russian production, along with the release of oil from global strategic reserves, helps explain the recent drop in crude prices, the bank's head of commodities research Natasha Kaneva said in a note to clients.

Russia's oil exports to Europe its biggest market have fallen relatively sharply in 2022, as companies have "self-sanctioned" in the wake of Vladimir Putin's invasion of Ukraine in late February.

However, Russia has been able to shift its exports towards Asia, with India and China in particular stepping up their purchases. More recently, a jump in domestic demand has caused Russian oil production to rise back to prewar levels.

"The market consensus was too pessimistic about Russia's capability to re-route volumes to other buyers," Kaneva and her colleagues said in the note Wednesday. "Russia's exports adjusted towards other buyers without a serious disruption to its production."

"At its peak, the oil market was pricing in the worst-case scenario a 3 million barrel a day loss of Russian production combined with record-high summer demand while, in reality, it never happened."

JPMorgan expects Russia production to produce 9.95 million barrels a day of oil in the third quarter, above the 9.76 million barrels a day produced in the same quarter a year earlier.

It thinks production will slip to 9.5 million barrels a day in 2023, staying relatively strong despite the European Union's ban on most oil imports from the country.

Oil prices have fallen in recent weeks, with global supply stronger than expected and demand likely to weaken in the coming months as the world economy slows. WTI crude, the US benchmark price, was down around 10% over the last month to trade at $98 a barrel Friday.

Russia's oil and gas revenues have helped Putin's government prop up the local currency, the ruble, alleviating some of the pressure on the economy.

However, the economy is still expected to shrink sharply this year. Imports have cratered in a sign of domestic stress.

Yale academics, led by Jeffrey Sonnenfeld, said in a study this week that Western sanctions are "catastrophically crippling" the economy, with domestic production slowing dramatically.


Riaz Haq said...

The (Chinese) yuan accounted for 31% of the non-US dollar payments for Russian coal in June and the Hong Kong dollar for 28%. The euro made up under a quarter and the Emirati dirham around one-sixth, the data from the trade source showed.

In June, Indian buyers paid for at least 742,000 tonnes of Russian coal using currencies other than the US dollar, according to a summary of deals compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44% of the 1.7 million of tonnes of Russian imports that month.,of%20Russian%20imports%20that%20month.

Indian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoiding the US dollar and cutting the risk of breaching Western sanctions against Moscow.

Reuters previously reported on a large Indian coal deal involving the Chinese yuan, but the customs data underline how non-dollar settlements are becoming commonplace.

India has aggressively stepped up purchases of Russian oil and coal since the war in Ukraine began, helping to cushion Moscow from the effects of sanctions and allowing New Delhi to secure raw materials at discounts compared to supplies from other countries.

Russia became India’s third-largest coal supplier in July, with imports rising by over a fifth compared with June to a record 2.06 million tonnes.

In June, Indian buyers paid for at least 742,000 tonnes of Russian coal using currencies other than the US dollar, according to a summary of deals compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44% of the 1.7 million of tonnes of Russian imports that month.

Indian steelmakers and cement manufacturers have bought Russian coal using the United Arab Emirates dirham, Hong Kong dollar, yuan and euro in recent weeks, according to customs documents separately reviewed by Reuters.

The yuan accounted for 31% of the non-US dollar payments for Russian coal in June and the Hong Kong dollar for 28%. The euro made up under a quarter and the Emirati dirham around one-sixth, the data from the trade source showed.

The Ministry of Finance, which administers the customs board, did not respond to emails seeking comment confirming the documents. The Ministry of Commerce and Industry declined to comment.

The Reserve Bank of India also did not respond to requests for comment.

The RBI has approved payments for commodities in the Indian rupee, a move it expects to boost bilateral trade with Russia in its own currency.

Riaz Haq said...

#US says #India hid #Russian origin of fuel shipped to the #UnitedStates. US Treasury Dept told India that an Indian ship picked up $oil from a Russian tanker on the high seas, brought it to a port in #Gujarat where it was refined and shipped to US. #Modi

The United States has expressed concern to India that it was being used to export fuel made from Russian crude, through high-seas transfers to hide its origin, to New York in violation of US sanctions, a top Indian central banker said on Saturday

The US Treasury Department told India that an Indian ship picked up oil from a Russian tanker on the high seas and brought it to a port in Gujarat on the west coast, where it was refined and shipped on, said Reserve Bank of India Deputy Governor Michael Patra.

US sanctions on Moscow for its February invasion of Ukraine prohibit the import to the United States of Russian-origin energy products including crude oil, refined fuels, distillates, coal and gas.

"The refined output was put back on that ship and it set sail without a destination. In the mid-seas it received the destination so it reached at its course, went to New York," Patra said at an event to celebrate 75 years of India's independence.

The US embassy in New Delhi said it had no immediate comment.

Patra's comments are India's first official public reference to such U.S. concerns. Delhi has not joined the sanctions against Russia or condemned what Moscow calls a "special military operation" in its neighbour.

Patra said he was told the Russian crude was processed and converted into a distillate used for making single-use plastic. He did not identify the Indian vessel or refiner.

"The refined output was put back on that ship and it set sail without a destination. In the mid-seas it received the destination so it reached at its course, went to New York," Patra said at an event to celebrate 75 years of India's independence.

The US embassy in New Delhi said it had no immediate comment.

Patra's comments are India's first official public reference to such U.S. concerns. Delhi has not joined the sanctions against Russia or condemned what Moscow calls a "special military operation" in its neighbour.

Patra said he was told the Russian crude was processed and converted into a distillate used for making single-use plastic. He did not identify the Indian vessel or refiner.

Riaz Haq said...

The United States has told India that an Indian ship was used earlier this year to export fuel made from Russian crude to New York through high-seas transfers, a top Indian central bank official said on Saturday.,bank%20official%20said%20on%20Saturday.

The U.S. Treasury Department told India that an Indian ship picked up oil from a Russian tanker on the high seas and brought it to a port in Gujarat on the west coast, where it was refined and shipped on, said Reserve Bank of India Deputy Governor Michael Patra.

U.S. sanctions on Moscow for its February invasion of Ukraine prohibit the import to the United States of Russian-origin energy products including crude oil, refined fuels, distillates, coal and gas.

"The refined output was put back on that ship and it set sail without a destination. In the mid-seas it received the destination so it reached at its course, went to New York," Patra said at an event to celebrate 75 years of India's independence.

The U.S. embassy in New Delhi said it had no immediate comment.

Patra's comments are India's first official public reference to such U.S. concerns. Delhi has not joined the sanctions against Russia or condemned what Moscow calls a "special military operation" in its neighbour.

Patra said he was told the Russian crude was processed and converted into a distillate used for making single-use plastic. He did not identify the Indian vessel or refiner.

"So that's the way war works. It works in strange ways," he said.

India, the world's number 3 oil importer and consumer rarely bought Russian oil in the past. But since the war started, Indian refiners have been snapping up discounted Russian oil, shunned by many Western countries and companies.

Riaz Haq said...

#Biden's effort to isolate #Russia has a big problem: #India. India accounted for less than 1% of Russia's #oil exports prior to the invasion, but was up to 13% by July, helping to offset Russia's lost market share in #Europe. #UkraineRussiaWar #Modi #US

Two global powers are undercutting Western efforts to isolate Russia and deplete the Kremlin coffers as they scale up purchases of Russian oil and join Russia this week in major military exercises.

Why it matters: One of those countries is China, which has moved closer to Moscow amid its confrontation with the U.S. The other, though, is India — one of Washington's most valued partners, which has taken a neutral position on Russia's invasion of Ukraine.

How it happened: The EU was by far the top destination for Russian oil prior to February's invasion of Ukraine, but EU countries have cut back their purchases and plan to end nearly all imports of Russian oil by year's end.

Even still, Russia's oil revenues are on track to jump by 38% this year, per Reuters. Asked about that projection this week, a White House spokesperson said it had made clear to countries that this is no time for "business as usual with Russia."
For China and India, it's been far beyond business as usual — they've both dramatically increased their purchases. India accounted for less than 1% of Russia's oil exports prior to the invasion, but was up to 13% by July, helping to offset Russia's lost market share in Europe.
Yes, but: That's due not to politics, but price. Prices from the Gulf have been sky-high, Russia is selling at a discount, and India is trying to keep inflation down and recover economically from the pandemic, Tanvi Madan of Brookings tells Axios.

Indian Foreign Minister Subrahmanyam Jaishankar has called it an "obligation and moral duty" to get the lowest-possible energy prices for Indian consumers. Russia, meanwhile, has praised India for resisting Western pressure.
What to watch: To stop Russia from benefiting from the high oil prices that its invasion helped create, the White House wants to put a price cap on Russian oil. G7 finance ministers will discuss that proposal on Friday.

For it to be effective, they'll need India on board. U.S. Deputy Treasury Secretary Wally Adeyemo visited New Delhi last week and said he'd had "a very constructive conversation" with Indian officials on the cap.
India has thus far been noncommittal. It stands to benefit from lower prices, but will be wary of provoking Moscow — particularly considering its military's overwhelming reliance on Russian arms.

Zoom out: The long-standing military relationship between India and Russia is on display this week at the Vostok war games in Russia's far east, which will also include China and several other countries.

India's troops will be "full-fledged" participants, not just observers, a source briefed on the matter tells Axios. The source noted that India has taken part in similar exercises in the past but doesn't "always publicize it."
Asked about India's participation, White House press secretary Karine Jean-Pierre said the U.S. "has concerns about any country exercising with Russia while Russia wages an unprovoked, brutal war against Ukraine."
Between the lines: She avoided any direct criticism of India and dodged a follow-up as to whether the U.S. has pressured India to stop helping Russia, as it has pressured China.

The Biden administration recognizes that India's long-standing relationship with Russia won't fade away overnight, and while it's trying to help New Delhi diversify its arms supply away from Russia, the U.S. priority is deepening coordination in the Indo-Pacific, Madan says.
The bottom line: India is too important to the U.S. strategy toward one top rival, China, to push back too hard as it undermines U.S. policy toward the other.

Riaz Haq said...

As the world lurches through the growing pains of massive geopolitical change, the US’ relationship with India will increasingly take center stage. Washington likes to see itself as providing a geopolitical center of gravity that is inherently attractive to nations like India, especially against regional competitors such as China. As the US is about to discover, however, India and China have a shared ambition about who should dominate the Pacific in the coming century, and it doesn’t include the US. Op Ed by Scott Ritter

On Aug. 19, India’s minister of external affairs, Subrahmanyam Jaishankar, gave a speech at a university in Thailand where he stated that relations between India and China were going through “an extremely difficult phase” and that an “Asian Century” seemed unlikely unless the two nations found a way to “join hands” and start working together.

For many observers, Jaishankar’s speech was taken as an opportunity for the US to drive a wedge between India and China, exploiting an ongoing border dispute along the Himalayan frontier to push India further into a pro-US orbit together with other Western-leaning regional powers. What these observers overlooked, however, was that the Indian minister was seeking the exact opposite from his speech, signaling that India was, in fact, interested in working with China to develop joint policies that would seek to replace US-led Western hegemony in the Pacific.

Struggle for Leadership

More than six decades ago, then-US Senator John F. Kennedy noted that there was a “struggle between India and China for the economic and political leadership of the East, for the respect of all Asia, for the opportunity to demonstrate whose way of life is the better.” The US, Kennedy argued, needed to focus on providing India the help it needed to win that struggle — even if India wasn’t asking for that help or, indeed, seeking to “win” any geopolitical contest with China.

Today, the relationships between the US, India and China have matured, with all three wrestling with complex, and often contradictory, policies that are simultaneously cooperative and confrontational. Notwithstanding this, the US continues to err on the side of helping India achieve a geopolitical “win” over China. One need only consider the Quadrilateral Security Dialogue, or “Quad,” conceived in 2007, but dormant until 2017, when it was resurrected under US leadership to bring together the US, Japan, Australia and India in an effort to create a regional counterweight to China’s growing influence.

There was a time when cooler heads cautioned against such an assertive US-led posture on a regional response to an expansive, and expanding, Chinese presence in the Indo-Pacific region. This line of thinking held that strong Indian relationships with Tokyo and Canberra should be allowed to naturally progress, independent of US regional ambitions.

These same “cool heads” argued that the US needed to be realistic in its expectations on relations between India and China, avoiding the pitfalls of Cold War-era “zero-sum game” calculations. The US should appreciate that India needed to implement a foreign policy that best met Indian needs. Moreover, they argued, a US-Indian relationship that was solely focused on China would not age well, given the transitory realities of a changing global geopolitical dynamic.

The Asian Century

The key to deciphering Jaishanker’s strategic intent in his Thailand comments lay in his use of the term “Asian Century.” This echoed the words of former Chinese reformist leader Deng Xiaoping, who, in a meeting with former Indian Prime Minister Rajiv Gandhi in 1988, declared that “in recent years people have been saying that the next century will be the century of Asia and the Pacific, as if that were sure to be the case. I disagree with this view.” Deng went on to explain that unless China and India focus their respective and collective energies on developing their economies, there could, in fact, be no “Asian Century.”

Riaz Haq said...

Narendra Modi’s Outreach to Vladimir Putin Risks Putting India in US Crosshairs - Bloomberg

Modi so far has managed to thread the needle between the two sides. But “no matter how much India wants to maintain the Russia relationship,” says @horror06 (Indrani Bagchi), “this is going to get more difficult as time goes by”

As Indian Prime Minister Narendra Modi meets Russia’s Vladimir Putin and attends a summit with China’s Xi Jinping on Friday, he’ll need to avoid looking too chummy with the US’s two top adversaries.

Modi’s face-to-face meeting with Putin will take place Friday in Uzbekistan, where a host of leaders are gathering for a summit of the Chinese-founded Shanghai Cooperation Organization, a group intended to counter the US-led global system. At that event, he’ll also rub shoulders with Xi, whom Modi hasn’t met in person since late 2019.

With Russia’s war in Ukraine in its seventh month, India has emerged as one of the biggest swing nations. The US and its allies have so far largely avoided pressuring New Delhi over its close ties with Russia, a key supplier of weapons and energy. That’s partly to keep Modi on its side against China in part through the Quad, a grouping that also includes Japan and Australia.

Modi so far has managed to thread the needle between the two sides while advancing India’s own interests. He’s sought cheaper oil and much-needed weapons, to counter Beijing’s aggression along their disputed Himalayan border and more investments from the US and its allies seeking to diversify supply chains away from China.

But whether he can keep that up is another question. The early tolerance for India’s position, along with its insistence that it would take time to unwind its deep security relationship with Russia, is beginning to run into greater resistance as the US and its allies ramp up efforts to impose a cap on the price for Russian oil to cut Putin’s income.

“India’s neutral public positioning on the invasion has raised difficult questions in Washington DC about our alignment of values and interests,” said Richard Rossow, a senior adviser on India policy at the Center for Strategic and International Studies. “Such engagements -- especially if they trigger new or expanded areas of cooperation that benefit Russia -- will further erode interest among Washington policy makers for providing India a ‘pass’ on tough sanctions decision.”

So far, the Biden administration has signaled it’s not interested in sanctioning New Delhi over its recent decision to buy the S-400 missile defense system from Russia. Turkey’s purchase of the same system deeply damaged US ties with the NATO ally.

Yet friction points are emerging. India has been pushing back on a price cap on Russian oil suggested by the US as its crude imports surged five times to cross $5 billion in the three months to the end of May.

Last week, the White House approved a $450 million package to upgrade the F-16 fighter jet fleet of India’s historic rival Pakistan -- a move New Delhi opposed.

And India also angered Japan by recently joining the Russia-led Vostok-2022 military exercises held around a group of islands known as the southern Kurils in Russia and the Northern Territories in Japan -- a territorial dispute that dates back to the end of World War II. India ended up scaling back its participation in the war games -- especially staying out of naval drills -- out of deference to Japan, but it left a mark.

One Japanese official, who asked not to be named discussing a sensitive topic, asked whether India would be comfortable if Japanese troops had participated in drills with Pakistan’s military but merely skipped exercises in the disputed region of Kashmir.

Riaz Haq said...

Narendra Modi’s Outreach to Vladimir Putin Risks Putting India in US Crosshairs - Bloomberg

India’s Foreign Ministry didn’t respond to a request for comment. Japan’s Foreign Ministry didn’t immediately respond to a request for comment made outside of office hours.

“The challenge for India is managing a declining relationship with Russia, nurturing a growing relationship with the US and securing its interests on all sides as a growing power,” said Indrani Bagchi, chief executive officer of the Ananta Aspen Centre, a research group on international relations and public policy. “No matter how much India wants to maintain the Russia relationship, this is going to get more difficult as time goes by.”

Modi appears aware of the optics toward the US. He was set to fly into Uzbekistan late on Thursday, missing an official dinner to kick off the Shanghai Cooperation Organization summit that would’ve produced plenty of photo opportunities with both Xi and Putin, according to people familiar with the situation, who asked not to be named.

India’s partners in the West will be closely watching the tone of any statements after Modi’s meeting with Putin. One particular area of interest is trade: In the first seven months this year, India’s imports from Russia stood at a little over $13 billion compared with just $2 billion a year earlier, according to Commerce Ministry figures. India’s exports to Russia dipped to $700 million in the same period compared to $950 million a year earlier.

While India’s historical connection with Russia will be tough to break, officials in New Delhi are more wary of China. The “no limits” friendship reached by Xi and Putin earlier this year also may factor into India’s long term strategic planning as tensions with China continue to simmer along their contested Himalayan border despite a recent pull-back of troops.

“Increasingly there are suggestions that Russia will largely follow China, especially after the Ukraine crisis,” said Harsh Pant, a professor of international relations at King’s College London. “And that is going to be one big part of the puzzle that India will have to solve.”

Riaz Haq said...

The big picture: The SCO is a political, economic and security organization designed to counter U.S. influence, which Beijing and Moscow founded in 2001.

It comprises leaders from India and Central Asia, including Kazakhstan, which was Xi's first stop on his three-day trip to Central Asia. Indian Prime Minister Narendra Modi attended the summit as well.


China's President Xi Jinping met with Russia's leader Vladimir Putin in Samarkand, Uzbekistan, on the sidelines of the Shanghai Cooperation Organization (SCO) summit Thursday.

Why it matters: Their first in-person encounter since Russian forces launched their Feb. 24 invasion of Ukraine marks a show of diplomatic support for the Russian president after Ukrainian troops forced his forces to retreat from much of Ukraine's northeast, even as Putin acknowledged that Beijing may have "questions and concerns" regarding the war.

Xi is aiming to bolster his standing as a geopolitical statesman in his first trip outside China since early in the COVID-19 pandemic before October's Communist Party leaders' meeting, when he's expected to secure a third term in office.
What they're saying: “We highly appreciate the balanced position of our Chinese friends in connection with the Ukrainian crisis,” Putin said in his opening remarks at the meeting, the New York Times reported.

“We understand your questions and concerns in this regard. During today’s meeting, of course, we will explain in detail our position on this issue, although we have spoken about this before," he added.
Putin also referred to Xi as a “dear and longtime friend," adding that Russia supports the One China principle and condemns the U.S.' "provocations" in Taiwan, per the Washington Post.
Xi did not comment on Ukraine or the perceived threat from NATO in his remarks at the meeting.
However, China released a statement after the meeting noting that it was "ready to work with Russia in extending strong support to each other on issues concerning their respective core interests," per the Times.
Worth noting: The Kremlin claimed in a statement ahead of Putin's trip to Samarkand that a senior official from the ruling Chinese Communist Party said during a visit to Russia last week that Beijing "understands and supports Russia," in particular "on the situation in Ukraine."

The state-run Xinhua News Agency said Li Zhanshu, the third-ranking member of the CCP, met with Putin, but it did not mention comments about Ukraine. It said Li pledged to "continue to work with Russia to firmly support each other on issues concerning each other's core interests and major concerns."
The big picture: The SCO is a political, economic and security organization designed to counter U.S. influence, which Beijing and Moscow founded in 2001.

It comprises leaders from India and Central Asia, including Kazakhstan, which was Xi's first stop on his three-day trip to Central Asia. Indian Prime Minister Narendra Modi attended the summit as well.
Iran announced earlier this week it would join the SCO, underscoring the growing alignment between the U.S.'s top adversaries.
Flashback: Xi and Putin last met in early February in Beijing, where they jointly announced a "no limits" partnership and the arrival of a "new era" of global politics — just weeks before Putin's invasion of Ukraine.

The Chinese leader backed the Russian president in warning against Western "interference" and a NATO expansion — which Putin later blamed in his attempts to try and justifying his forces' unprovoked invasion of Ukraine.
Between the lines: Both Putin and Xi are now in more precarious situations than they were in February. The Russian economy is increasingly isolated by a tough Western-led sanctions regime, and the Russian army has recently suffered major setbacks in Ukraine after a successful counteroffensive by the Ukrainian military.

Riaz Haq said...

Russian President Vladimir Putin told India's Narendra Modi on Friday that he understood New Delhi's concerns about the conflict in Ukraine and wanted it to end "as soon as possible", according to a readout of a bilateral meeting published by the Kremlin.

The Indian prime minister told Putin on the sidelines of a regional security bloc summit in Uzbekistan: "I know that today's era is not an era of war, and I have spoken to you on the phone about this." He said democracy, diplomacy and dialogue kept the world together.

But Putin said Kyiv had rejected negotiations and was set on achieving its own objectives "on the battlefield".

"I know your position on the conflict in Ukraine, your concerns that you constantly express," he told Modi on the sidelines of a summit of the Shanghai Cooperation Organisation in Samarkand, Uzbekistan.

"We will do everything to stop this as soon as possible. Only, unfortunately, the opposing side, the leadership of Ukraine, announced its rejection of the negotiation process and stated that it wants to achieve its goals by military means."

Russia controls around a fifth of Ukraine after sending its armed forces into its neighbour's territory from several directions in February.

It says that what it calls a "special military operation" was necessary to prevent Ukraine being used as a platform for Western aggression, and to defend Russian-speakers.

Kyiv and its Western allies dismiss these arguments as baseless pretexts for an imperial-style war of acquisition, and have urged Russia to withdraw unconditionally.

Putin had made similar comments to Chinese leader Xi Jinping on Thursday, saying he understood Beijing's concerns about the conflict.

Russia is trying to forge closer ties with both China and India as Moscow faces isolation and onerous sanctions from the West over its invasion of Ukraine.

Both countries have stepped up their purchases of Russian energy - trading at a discount on world markets as Western countries buy less - and talked about building closer economic ties.

(Reporting by Reuters; Editing by Kevin Liffey)

Riaz Haq said...

Senators seek secondary sanctions on Russian oil purchases that could irk India, China

(Bloomberg) — A bipartisan pair of senators is pressing the Biden administration to use secondary sanctions to enforce a cap on the price of Russian oil.

The push comes as the US and Group of Seven nations seek to limit Russian President Vladimir Putin’s ability to fund his war in Ukraine.

Senators Chris Van Hollen, a Maryland Democrat, and Pennsylvania Republican Pat Toomey are working on legislation that would impose secondary sanctions on foreign firms that facilitate the trade of Russian oil and on countries that increase their purchases of the commodity.

The pair worked together before and co-sponsored the Senate version of the Hong Kong Autonomy Act that imposed sanctions on Chinese officials involved in the crackdown on dissent in the territory and was signed into law by Donald Trump.

“We have yet to effectively cut off funding to Putin’s war machine by diminishing Russia’s revenues from energy sales,” Van Hollen and Toomey, who are both members of the Banking Committee, said in a statement. “In order to successfully enforce the price cap, it’s clear the administration requires new authority from Congress.”

The legislation sets up a clash with the Biden administration, which has previously rejected secondary sanctions as a way to enforce the oil price cap. Biden’s team argues that the economic incentives of a cap are sufficient to induce cooperation and secondary sanctions would create tensions with nations such as India, which continue to buy Russian oil.

Buyer Incentives

“I don’t think you need secondary sanctions for this to work,” Deputy Treasury Secretary Wally Adeyemo said in a Sept/ 6 interview with Bloomberg reporters in New York. “The incentives of buyers are aligned with the incentives of the countries that are putting in place the price cap.”

A Treasury Department spokesperson declined to comment. A person familiar with the matter, who asked not to be identified discussing private deliberations, said Treasury had been briefed on the framework.

But Congress has repeatedly steered the administration toward harder-line policies on Russia since its Feb. 24 invasion. The most prominent example was when the administration, under pressure from lawmakers, reversed its opposition to cutting off some Russian banks from the SWIFT financial messaging system.

Bilateral Strains

If passed, the legislation could provoke a major fight with countries such as India and China, which have ramped up their purchases of Russian oil and have reacted coolly to the idea of a price cap. The US has been careful in its interactions with India on the price cap, pitching it as a way to negotiate lower prices from Russia but steering clear of threatening penalties for failing to join the scheme.

Under the two senators’ proposal, the US and its allies would be required to impose a cap on the price of Russian seaborne oil by March 2023. The cap would then be reduced by one-third every year until it reaches the break-even price within three years, depriving Putin of any revenue above the price of production. The president can waive the price reduction if the administration determines it would cause the global price of oil to spike.

The cap would be enforced by secondary sanctions on any firms involved in the sale or transportation of Russian oil, including banks, insurance and re-insurance companies and brokerages.

The legislation, which has not yet been introduced, would also penalize countries found to be importing Russian oil, oil products, gas and coal above their pre-war levels.

Van Hollen and Toomey said secondary sanctions would give the administration the tools it needs to “hold accountable the financial institutions supporting those countries involved in rampant war profiteering from Russian exports.”

Riaz Haq said...

#Russia becomes #India’s 2nd-largest crude #oil supplier after #SaudiArabia. India’s September imports of Russian oil rose 18.5% from August reaching 879,000 barrels per day (bpd) of #Russian oil in September 2022.

India’s September imports of Russian oil rose 18.5% from August after falling for two months, making it the country’s second-largest crude supplier after Saudi Arabia, according to energy cargo tracker Vortexa. The import of 879,000 barrels per day (bpd) of Russian oil in September is the second highest in a month ever for India after June’s 933,000 bpd.

“India may consider importing more Russian crude this quarter as refiners ramp up runs to meet the seasonal rise in domestic demand an ..

Riaz Haq said...

Suhasini Haidar
Russia is India's second largest oil supplier, contribution to Indian imports now 21% , up from 1% before Ukraine war

Riaz Haq said...

Pakistan, Ukraine, And The Race For Third-Party Ammunition
In the rush to source artillery rounds, Ukraine and its allies turned to Pakistan and an air bridge provided by military cargo planes.

| PUBLISHED OCT 6, 2022 7:11 PM

In a plea for assistance in June of this year, Ukraine’s Deputy Head of Military Intelligence, Vadym Skibitsky, told reporters that the conflict with Russia “is now an artillery war that we are losing, [as] Ukraine has one artillery piece to 10-15 Russian artillery pieces and we have almost used up all of our ammunition.” Although the United States and allies in Europe were already delivering shells to Ukraine, they themselves found their stocks also decreasing at an alarming rate. In a surprising development, Pakistan emerged as an important source and an air bridge was established to bring much-needed ammunition to Ukraine.

In a war where artillery has become king, both Russia and Ukraine have been looking for any means to refill their ammunition reserves. Russia's losses of major weapons storage areas, especially to precision strikes from Ukraine's U.S.-supplied High Mobility Artillery Rocket Systems (HIMARS), only accelerated its need for fresh ammunition.

Ukraine had burned through its Soviet-era artillery stocks just a handful of months into the war and was gobbling up whatever its allies could give it. These concerns seem to have effectively warranted a boost in the capacity and creativity of both manufacturers and states, as both Russia and Ukraine have turned to unforeseen partners for answers.

For NATO states, employing standard calibers enables them to further share ammunition stores. But several months into the conflict, the West had to think outside the box to replenish Ukrainian artillery stockpiles, which by then comprised of a mix of Soviet-era and NATO calibers and types.

Beginning on August 6, open-source intelligence began to reveal that a U.K. Royal Air Force (RAF) C-17 Globemaster III aircraft (serial ZZ143) was conducting almost daily flights from Romania’s Cluj International Airport or RAF Akrotiri in Cyprus to Pakistan’s Nur Khan Air Base. This development came days after Britain announced it would be supplying Ukraine with more than 50,000 Soviet-type artillery shells. Over the course of 15 days, the C-17 Pakistan-Romania airlift effort completed a total of 12 trips, leading many analysts to assume that the United Kingdom was transporting military supplies for the Ukrainians. No flights have been tracked between these destinations since August 22.

While we don't know exactly what those aircraft were carrying, evidence of 122mm HOW HE-D30 artillery shells manufactured by the Pakistan Ordnance Factories (POF) in Ukrainian hands subsequently emerged. In one video gone viral on social media, seen below, where the POF 122-mm shells are seen being unpacked, it is possible to identify them based on several elements including the specific British-style steel-box packaging typically used by the company and the LIU-4 type fuzes that are also distinctive to POF’s Soviet-type 122mm artillery.

Riaz Haq said...

Pakistan, Ukraine, And The Race For Third-Party Ammunition
In the rush to source artillery rounds, Ukraine and its allies turned to Pakistan and an air bridge provided by military cargo planes.

While no flights have been tracked between these destinations since August 22, it appears that the Pakistan-made projectiles are now in the hands of Ukrainian troops. In a video gone viral on social media, where the POF 122-mm shells are seen being unpacked, it is possible to identify them based on several elements including the specific British-style steel-box packaging typically used by the company and the LIU-4 type fuzes that are also distinctive to POF’s Soviet-type 122mm artillery.

Since the appearance of this footage on the battlefield, no formal confirmation has been given by either Pakistani or British authorities. When reached for comment, a senior POF employee told The War Zone that “he was told not to answer any of the questions related to this matter.” Similarly, the only remark the U.K. MoD has given on the issue is that the country “remains steadfast in its support for Ukraine and it is working with a range of allies and partners to ensure it has what it needs to defend itself against Russia’s brutal invasion.” More recently, the RAF’s C-17 aircraft has been active but only within Europe making regular trips from and to Poland’s Rzeszow Air Base, which serves as an entry point to ship military aid into Ukraine.

The POF’s 122mm HOW HE-D30 projectiles are semi-fixed ammunition for howitzers, with a maximum range of 9.5 miles and a muzzle velocity (the speed at which projectile leaves the barrel) of 2,270 feet per second (690 meters/s.) The complete weight of the round, taking into account the projectile and shell, is about 28 pounds.

It is important to note that the entry of Pakistani ordnance into the conflict would never turn the tide of the war, given also that the number of rounds sent remains unknown. But it may have played a significant role in bridging the gap between the delivery of more Western artillery systems and Ukraine's wind-down of using Soviet-era ones.

Although it may be surprising to see British authorities turn to POF for these supplies, the two actually share a long-standing history. The POF was established in 1951 by the Pakistani government with collaboration from the British Royal Ordnance Factory (an ensemble of U.K. munition factories established during and after World War II). Public British Parliament documents further show that in the 1970s, under licensed production deals, Britain provided training for the engineers and POF staff as well as a technology transfer for the manufacturing of 105mm L64 Tungsten ammunition. The POF is also one of the main manufacturers still producing large amounts of Soviet-style artillery ammunition.


The story of Pakistani artillery shells making their way to Ukrainian artillery is something of a metaphor for how the push to supply Kyiv with the weapons it needed to hold off the Russian war machine. These efforts, which appear to have been clandestine, at least in part, look to have been an 'all hands on deck' scramble. Old relationships, modern airlifter logistics, plenty of money, and the will to make it happen proved integral in helping save Ukraine from being completely overrun by Russian forces.

Riaz Haq said...

NEW DELHI, Oct 27 (Reuters) - India's oil imports from the Middle East fell to a 19-month low in September while Russian imports rebounded although refining outages hit overall crude imports, data from trade and shipping sources showed.

Iraq remained the top supplier while Russia overtook Saudi Arabia as the second biggest after a gap of a month, the data showed.

India's total oil imports in September fell to a 14-month low of 3.91 million barrels per day (bpd), down 5.6% from a year earlier, due to maintenance at refiners such as Reliance Industries (RELI.NS) and Indian Oil Corp (IOC.NS), the data showed.

India's imports from the Middle East fell to about 2.2 million bpd, down 16.2% from August, the data showed, while imports from Russia increased 4.6% to about 896,000 bpd after dipping in the previous two months.

Russia's share of India's oil imports surged to an all-time high of 23% from 19% the previous month while that of the Middle East declined to 56.4% from 59%, the data showed.

The share of Caspian Sea oil, mainly from Kazakhstan, Russia and Azerbaijan, rose to 28% from 24.6%.

India has emerged as Russia's second biggest oil buyer after China, taking advantage of discounted prices as some Western entities shun purchases over Moscow's invasion of Ukraine.

"The discount on Russian oil has narrowed now but when you compare its landed cost with other grades such as those from the Middle East, Russian oil turned out to be cheaper," said a source at one of India's state refiners.

Imports for Saudi Arabia fell to a three-month low of about 758,000 bpd, down 12.3% from August, while imports from Iraq plunged to 948,400 bpd, their lowest level in a year, the data showed.

Imports from the United Arab Emirates declined to a 16-month low of about 262,000 bpd.

Higher intake of Caspian Sea oil has hit the share of other regions in India's imports in April-September, the first half of the fiscal year, and also cut OPEC's market share in the world's third biggest oil importer and consumer to its lowest ever.

In the first half of this fiscal year, Indian refiners also reduced purchases of African oil, mostly bought from the spot market. However, supply from the Middle East rose from a low base last year when the second wave of the coronavirus cut fuel demand.

Riaz Haq said...

#Russia Becomes #India’s Top Crude Oil Supplier, Overtaking OPEC Heavyweights #Iraq & #SaudiArabia. India received record-breaking 946,000 barrels per day (bpd) of #Russian crude in October. #UkraineWar #Modi #Putin | #oilprice

Before the Russian invasion of Ukraine, India was a small marginal buyer of Russian crude oil. After Western buyers started shunning crude from Russia, India became a top destination for Russian oil exports alongside China.

Indian refiners haven’t expressed hesitation to deal with Russia—their primary incentive to buy has been the much cheaper Russian oil than international benchmarks and similar grades from the Middle East and Africa.

According to Vortexa’s estimates, India—the world’s third-largest crude oil importer—shipped in a record 946,000 bpd of crude from Russia last month, up by 8% compared to September. Total Indian imports increased by 5% month on month in October, Vortexa data cited by the Economic Times showed.

Of note was that Russia surpassed both Iraq and Saudi Arabia to become the number-one crude oil supplier to India. Russian crude accounted for 22% of all Indian imports last month, while Iraq’s share was at 20.5% and Saudi Arabia’s—at 16%.

Going forward, there will be a lot of uncertainties among buyers over Russia’s oil exports when the EU embargo enters into force on December 5.

Indian Oil Corporation and Bharat Petroleum Corporation Limited (BPCL), two of the biggest state-owned importers of Russian crude oil in India, have reportedly stopped looking for spot Russian crude oil supply set to arrive after December 5, as they await more clarity on the EU sanctions regime ahead of the deadline, including on the possibility of secondary sanctions on buyers of Russian crude.

India will also further diversify its oil imports to better prepare for future OPEC+ production cuts that raise oil prices and tighten supply, its Petroleum Minister Hardeep Singh Puri said last month.

Riaz Haq said...

Russia’s gross international reserves (GIR) were up by $3.6bn in a week to $571.2bn as of August 5, the Central Bank of Russia (CBR) reported, at the same time as individuals are buying record amounts of foreign currency.

Russia’s international reserves increased by 0.6% (or $3.6bn) in one week, the central bank reported on August 11. The CBR stopped reporting the monthly reserves figures at the end of January when total GIR stood at $630.2bn. (chart)

"International reserves amounted to $574.8bn as of August 5, up by $3.6bn, or by 0.6%, in one week due to positive revaluation," the regulator said on its website.

Foreign exchange is pouring into the CBR coffers after the current account surplus of Russia's balance of payments hit a new all-time high of $166bn in the first seven months of this year – triple its level in the same period a year earlier that was already a record high. Sanctions intended to reduce Russia’s revenue from energy exports have backfired, and after they sent prices soaring the Kremlin is earning more money than ever. Ironically, the highly effective bans on exports of equipment and technology to Russia have worked against the leaky energy sanctions as they have dramatically reduced imports to Russia that have only bolstered the current account surplus further.

Some $300bn worth of gold and foreign currency CBR reserves were frozen shortly after the invasion of Ukraine in February, but the soaring revenues from oil exports will cover a large share of that money by the end of this year, say economists.

Russians buy record amounts of FX on MOEX

The crisis-scarred population have also been reacting to the sanctions on currency transactions by moving their cash savings out of the traditional dollars and euros into other currencies of the “friendly” countries.

Individual purchases of currency on MOE overtook transactions by bankers for the first time ever in the second half of July, the CBR said in its latest financial market risks review.

Net purchases of currency by individuals increased 1.3-fold from RUB176.1bn ($2.9bn) in June to RUB237.1bn ($3.9bn) in July – a new record, according to the CBR.

Individuals mainly bought foreign currency at banks that could then send the money to accounts overseas.

The outflow of currency has also been visible in the ruble-dollar exchange rate, as the ruble weakened and was trading at RUB60.6 at the time of writing, down from its recent high of almost RUB50 to the dollar. As imports recover, further growth of foreign currency demands can be expected for market players, the central bank said.

The “yuanisation” of the Russian economy continues as a result of the Western sanctions imposed on Russia. The yuan became the third most traded currency in terms of volume of foreign exchange trading on the Moscow Exchange in July and will soon take second place, The Bell reported on August 8, as companies and individuals rush to get out of the dollar and into non-sanctioned currencies.

Banks have been building up large amounts of dollars and euros they can’t spend due to sanctions and have been actively trying to swap them for other currencies.

The government has been doing the same thing, signing trade deals with its partners in local currency and using other non-traditional currencies for international trade. Russia oil exports to India are now being settled in Chinese yuan, Hong Kong dollars and UAE dinars, according to reports.

Ordinary Russians have been moving their savings out of dollars. Balances at retail bank accounts in foreign currency declined in July by $3bn, the CBR reports. Just before the war there was only one Russian bank that offered deposit accounts in yuan; now there are 20, according to The Bell.

Riaz Haq said...

Russia is India's fifth largest trade partner (after US, China, UAE and Saudi Arabia) jumps from 25th

The large shipments of oil and fertilizer have also meant that India's trade deficit jumped from $20 billion in first half of the current fiscal year to $44 billion in second half.


#Russia is #India's 5th largest trade partner (after #US, #China, #UAE, #SaudiArabia), up from 25th. Huge imports of #oil & #fertilizer caused India's #trade deficit to jump from $20 billion in 1H of current fiscal year to $44 billion in second half.

Riaz Haq said...

''You (#India) Benefit From Our Suffering" #Ukraine Minister Dmytro Kuleba's Message:''The opportunity for India to buy #Russian #oil at a cheap price comes from the fact that Ukrainians are suffering from Russian aggression and dying every day" via @ndtv

New Delhi: Ukraine's Foreign Minister has hit out at India over imports of cheap Russian oil, referring to it as being ''morally inappropriate.'' ''The opportunity for India to buy Russian oil at a cheap price comes from the fact that Ukrainians are suffering from Russian aggression and dying every day,'' said Dmytro Kuleba in an exclusive conversation with NDTV.
''If you benefit because of our suffering, it would be good to see more of your help addressed to us," Mr Kuleba said, responding to Indian Foreign Minister S Jaishankar's statement on Monday that between the months of February and November this year, the European Union (EU) has imported more fossil fuel from Russia than the next 10 countries combined.

''It is not enough to point fingers at the European Union and say, Oh, they are doing the same thing," the Ukrainian Foreign Minister said.

NDTV has reached out to the Foreign Ministry for a response.

According to Mr Kuleba, India's decision to import cheap Russian oil needs to be seen through the prism of human suffering in Ukraine.

The Ukrainian Foreign Minister also said that India, specifically Prime Minister Narendra Modi, has a key role to play in helping to end the war.

''India is a very important player in the global arena and the Prime Minister of India, with his voice, can make a change.'' At the same time, New Delhi, he believes, needs to be direct in referring to the situation in Ukraine.

''We are waiting for the moment when Indian foreign policy will call spade a spade, and name the conflict - not 'war in Ukraine', but what it is, a 'Russian aggression against Ukraine'," he said.

India maintains a close strategic relationship with Russia and has repeatedly abstained in voting against Moscow in United Nations resolutions which condemn the Russian annexation of Ukrainian territory.

Asked if New Delhi's intervention could realistically make a difference in the thinking of Russian President Vladimir Putin, Mr Kuleba said it was important to make a concerted effort.

''If you don't try, nothing can change,'' said Mr Kuleba.

''We have seen some encouraging messages coming from your Prime Minister - when he said this is not the time for war. We hope that (there) is more active, even if it is quiet, behind-the-scenes diplomacy (that) will take place in the coming weeks. It's worth trying (in) any way to end the war," he said.

Russia invaded Ukraine on 24 February 2022 capturing thousands of square kilometres in the East and South of Ukraine, territory that it has since lost to concerted Ukrainian military counter-attacks. Over the last few weeks, Ukraine has been able to re-take the city of Kherson.

He said Kyiv will not halt its military offensive this winter. ''We will not stop for a single day because every pause means more time for the Russians to dig into the ground, to build fortifications and to strengthen their defensive lines in the occupied territories of Ukraine," he said.

Over the last several weeks, Ukraine has come under concerted Russian drone and missile attacks targeting civilian infrastructure, particularly power facilities.

"Our problem is that our electricity grid was built during the Soviet times and, therefore, Russia has all the maps and technical documentation necessary to identify precisely the most critical elements of our energy infrastructure," Mr Kuleba said.

Riaz Haq said...

India's export destinations: Netherlands and Brazil leapfrog ahead

While several countries have reduced their dependence on Russia-refined oil products, India, which has seen a sharp spike in crude imported from Russia, is seen to be processing it and exporting to many countries, especially in Europe.

Netherlands is now India's third-largest export destination. Brazil, India's 20th biggest export destination between April and October 2021, is currently in the eighth position. US & UAE remain on top.

Read more at:

Riaz Haq said...

North Korea, Iran, Pakistan: Secret arms suppliers keep war in Ukraine going

Russia and Ukraine are seeking to replenish their stocks by any means, including deals shrouded in secrecy.

This is an unexpected consequence of the so-called high-intensity war that Russia and Ukraine have been engaged in since February 24, when Vladimir Putin launched his "special military operation." Both sides are engaged in attrition warfare, which Europe has not seen since World War II, and are now short on some equipment. According to the Western military and intelligence services, they are no longer hesitating to call upon countries such as North Korea, Iran and Pakistan to replenish their armories.

According to information declassified by Washington and revealed on Tuesday, September 6 by the New York Times, Russia is buying millions of artillery shells and rockets from North Korea to supply its troops in Ukraine. While no evidence or details were given regarding the materials supplied, Pyongyang is capable of manufacturing 152mm shells, one of the calibers used by Russian forces, as well as projectiles for TOS-1 multiple rocket launchers, which have been reported on the Ukrainian front.

In mid-July, White House National Security Adviser Jake Sullivan also said that Washington had information that Tehran "is preparing to provide Russia with up to several hundred [drones] on an expedited timeline." "Russian transport aircraft loaded the [drones] at an airfield in Iran and subsequently flew from Iran to Russia over several days in August," confirmed Pentagon spokesman Brigadier General Pat Ryder on August 30.

According to military experts, the devices sent by Tehran could be ground attack drones, in particular the Shahed-129, a machine that can fly for up to 24 hours at a time and is considered to be a competitor to the American Predator. They could also include the Mohajer-6, a smaller drone capable of carrying up to four munitions. According to the US Department of Defense, these drones have probably not yet been sent to the front lines and could have "numerous failures," which the Russians would try to resolve. In fact, no images have yet surfaced showing these devices in action over Ukrainian soil.

Riaz Haq said...

Russia and Pakistan might cut unprecedented oil deal, with China as middleman
January 22, 2023 Wajahat S. Khan

Cold War rivals Russia and Pakistan are negotiating an agreement for the Russians to start selling cheap oil to energy-starved Pakistan in March.

This will make Islamabad yet another Asian customer of Russian crude at a time when Moscow’s cash inflows are limited by a G7/EU oil cap and sanctions. Also, considering Pakistan is dead broke, payments will be made through a “friendly” country, presumably China – a power play for Beijing, whose yuan will be used for the transactions, giving the currency more sway as an alternative to the US dollar.

How is this deal going to affect American interests in the region? And why is Pakistan, which wants to balance its ties with Washington, giving business to the Russians through China?

First, some history. Although the agreement isn’t finalized, it’ll be geopolitically novel when it is because Pakistan is an unlikely destination for Russian business. Unlike India, Islamabad and Moscow have had no commercial ties for decades.

Considering Pakistan spent the Cold War spying on the USSR and/or attacking its troops in Afghanistan (the Soviet Union paid back in kind by arming India, Pakistan’s archrival), the two sides haven’t exactly behaved like partner-material.

Enter China. Pakistan and China have been “Iron Brothers” for decades. Even though Islamabad was a non-treaty US ally until not too long ago, the Pakistanis and the Chinese have always remained “all-weather friends.”

However, as India settled into the role of becoming America’s strategic partner in the region, displacing Pakistan as the preferred South Asian ally over the last two decades, the Chinese encouraged Pakistan to open up to the Russians, and vice versa. Now, a once hesitant Islamabad doesn’t just want Russian oil, but also natural gas, weapons and more. Still, Islamabad wants to stay aligned with the American camp.

Why is Pakistan doing this? Islamabad’s energy bills make the biggest chunk of its imports. Cheaper oil from Russia will obviously help its escalating balance of payments crisis and ballooning trade deficit.

But the biggest issue is with dwindling foreign exchange reserves. A year ago, Pakistan had $17 billion in the bank. Today, foreign reserves have dwindled to $4.3 billion, which will pay for less than a month of imports.

To manage the dollar crunch, Pakistan could use the Chinese yuan in a swap with China to pay Russia once the oil flows in (it expects to get 35% of its annual crude oil imports from 70 million barrels of Russian crude), putting its import-regime firmly in the China-Russia camp.

Pakistan thus finds itself between a rock and a hard place: It needs the cheap Russian oil but also wants to avoid antagonizing the US and its friends in the Gulf, Pakistan’s main energy suppliers — especially considering that Islamabad has been negotiating bailouts with the Washington-backed IMF and deferred oil payments from the Saudis and the Emiratis.

While the Pakistanis defend their position by citing neighboring India as an example of a country that buys Russian oil even as it tilts towards the US and deals with the Gulf states, Islamabad is in a very different position compared to New Delhi because Pakistan is crawling toward default.

But that’s exactly how Washington and Beijing might find confluence to stop Pakistan from failing. “The US view on this is that countries like Pakistan may at times be strategically important, but in the great power competition between China and US, it doesn’t matter a whole lot,” says Uzair Younus, director of the Pakistan Initiative at the Atlantic Council.

Beyond Pakistan’s limited importance as a partner for counterterrorism in Afghanistan, he assesses that the view from Washington is that if others want to share the burden of propping up Pakistan and stabilizing its economy, so be it.

Riaz Haq said...

#US: #Pakistan can buy #Russian #oil despite restrictions. “So, we have encouraged countries to take advantage of that, even those countries that have not formally signed on to the price cap, so that they can acquire oil in some cases at a steep discount"

The United States has reiterated that Pakistan can purchase oil from Russia at a discounted price even though it has not signed a Washington-backed price-cap on Russian petroleum products.

US State Department’s spokesperson Ned Price told reporters at a Tuesday afternoon news briefing that Pakistan can also take advantage of the concessions Washington has given to other countries for buying oil from Russia.

“So, we have encouraged countries to take advantage of that, even those countries that have not formally signed on to the price cap, so that they can acquire oil in some cases at a steep discount from what they would otherwise acquire from, in this case, Russia,” Mr Price said.

On December 3, 2022, G7 and EU countries set a price-cap of $60 per barrel on Russian oil to prevent Moscow from using the revenues to finance its war against Ukraine.

Since, Europe and the United States no longer import crude oil from Russia, the controlled purchase would only affect third countries, like Pakistan. Islamabad has not yet signed the accord, mainly because Pakistan does not import oil from Russia.

Mr Price said the US approach to the purchase of oil from Russia has been laid out in the price-cap mechanism that it worked out with other countries around the world, including the G7.

“And the virtue of the price cap is that it allows energy markets to continue to be resourced while depriving Moscow of the revenue it would need to continue to propagate and fuel its brutal war against Ukraine,” the US official said.

“We have made the point that we have very intentionally not sanctioned Russian oil. Instead, it’s now subject to the price cap.” The US, he said, has been very clear that now was not the time to increase economic activity with Russia.

“But we understand the imperative of keeping global energy markets well resourced, well supplied, and the price-cap, we believe, provides a mechanism to do that,” he added.

On Friday, Minister for Economic Affairs Ayaz Sadiq, and Russia’s Energy Minister Nikolay Shulginov said at a joint news conference in Islamabad that they hope to sign an oil deal by late March, enabling Pakistan to buy Russian oil at discounted rates.

A joint statement issued after their talks said that the two sides reached an in-principle agreement on the supply of Russian crude oil and oil products to Pakistan, with technical details to be finalised in March at the latest.

“We have decided that it would be a good idea for Pakistan to approach Gazprom and Novatek, two largest LNG-producing companies, in late 2023 to discuss the conditions” for buying LNG, the Russian minister said.

Energy-starved Pakistan imports approximately 430,000mt of motor gasoline, 200,000mt diesel and 650,000mt crude oil at a cost of $1.3 billion per month.

Market observers earlier this month warned Pakistan may face fuel shortages in the near future as importers struggle to secure dollars to close deals. The country’s foreign exchange reserves have dwindled to their lowest levels in almost nine years.

Buying oil from Russia at a discounted price could ease the pressure.

Riaz Haq said...

#Ukraine wants #US to impose #sanctions against #India for “financing the Russian economy and the Russian military machine". #Russia #oil #economy | Mint

As the Ukraine-Russia war nears the one year mark, a top official has called for sanctions to be imposed against India. Senior Ukrainian lawmaker Oleksandr Merezhko urged the United States to impose secondary sanctions on China and India if they keep buying Russian energy. The official who heads the foreign affairs committee in Ukraine's parliament, also called for greater ties with Taiwan.

Merezhko said that he had previously lived in New Delhi and found the question of India's oil purchases "painful". But as the war continues with no end in sight, the lawmaker also backed sanctions against buyers contending that such nations were “financing the Russian economy and the Russian military machine".

"They should be consistent. This is a global conflict between democracy - the free world - and authoritarian regimes. There shouldn't be any compromise because of material economic interest," he said.

The western sanctions against Moscow are currently not recognised by India.

Meanwhile, according to a Reuters report citing unnamed sources, Indian refiners have started paying for a significant part of their Russian oil purchases in UAE dirhams. While the purchase of Russian oil does not at present violate any sanctions, banks and financial institutions have become increasingly wary about clearing payments in a manner that will not fall foul of the many measures imposed against the other country.

Indian refiners and traders are concerned they may not be able to continue to settle trades in dollars, especially if the price of Russian crude rises above a cap imposed by the Group of Seven nations and Australia in December. That has led traders to seek alternative methods of payment, which could also aid Russia's efforts to de-dollarise its economy in response to the Western sanctions.

Riaz Haq said...

Why is democratic India helping Russia avoid Western sanctions?

Though India does not produce some of the items Russia desperately needs due to Western sanctions, such as microchips, it does make plenty of others.

“Right now the focus is on pharmaceuticals, electronics, machinery, chemical products, medical instruments, and agricultural products,” says Dr. Kapoor. “We have already been exporting these goods to Russia, and there is potential for major increases. ... It may be harder to expand the list due to the threat of secondary sanctions. In this environment, the Indian private sector looks at Russia as a risky market. But the immediate potential is very big.”


Since Russia’s invasion of Ukraine a year ago, the West has tried to curtail Moscow’s ability to finance the war by restricting its lucrative energy exports.

Over that same time, Asia’s biggest democracy, India, has ramped up its imports of Russian oil by a whopping 33 times.

The future world order may turn on realignments like this.

Much of the Global South – including key countries in Asia, Africa, and Latin America – has declined to join the anti-Moscow sanctions regime, and has instead chosen to maintain active political and commercial relations with Russia. This is part of the reason the Russian economy has so far avoided the intended body blows, but it is also reshaping global trading patterns in ways that might outlast the conflict.

In particular, Russian efforts to evade the restrictions that come with using the U.S. dollar in international transactions may be accelerating the process of dethroning the dollar as the world’s established reserve currency, with vast implications for U.S. financial and political leadership down the road.

India, a fast-growing, secular, English-speaking Asian democracy with an increasingly Westward-leaning popular culture, serves as a prime example as to why the West is not getting buy-in for sanctions – and how the world may realign.

“India is not happy with what Russia did,” says Nandan Unnikrishnan, an expert with the independent, Delhi-based Observer Research Foundation. “But in the longstanding relationship we have with Russia, they have repeatedly proven to be good partners for India. India does not want to lose a friend. As for the moral argument the Americans often cite, well, we don’t accept that. It hardly bears mentioning that we can think of zillions of examples of Western hypocrisy.”

Early in the war, U.S. diplomats made strenuous efforts to convince Delhi to condemn Russian actions in Ukraine, or at least limit its long-standing political and trading relationship with Russia. While privately making clear its disagreement with Russia’s war – a view shared by much of India’s elite – Indian leaders refused to vote against Moscow in the United Nations or to join in any level of the sanctions campaign. Instead it accepted Russian offers of price discounts, which led to a vast increase in India’s imports of Russian oil.

Riaz Haq said...

Why is democratic India helping Russia avoid Western sanctions?

Mr. Unnikrishnan says that one way to avoid the long arm of U.S. sanctions – which would hit any attempt to export items with U.S. parts or technology to Russia – is to set up distinct businesses that deal only with the Russian market, as is reportedly already being done in China.

“Some Indian businesses are exploring ways to set up separate production facilities, only for export to Russia. The Indian government is already in the process of certifying Indian generic pharmaceuticals for export to the Russian market,” he says. “There are a lot of ways that joint India-Russia collaboration and trade can be expanded.”

Current Russian policy is to push for abandoning dollar trade in every area, and there has been a lot of talk about creating an alternative currency, perhaps for use among the BRICS trading bloc.

It’s all easier said than done, says Konstantin Sonin, a Russian expatriate professor at the University of Chicago.

“De-dollarization would be very costly to implement,” he says. “People use the U.S. dollar because it’s a more stable, reliable, and liquid currency than any other. There is a premium to be paid for using riskier assets. Nothing Russia can do is likely to dislodge the U.S. dollar from this role. The main threats to the dollar are potential internal instability in the U.S., which might undermine the dollar’s value, or the possibility that some other big country, like China, might develop a viable alternative.”

He says that countries like India are taking advantage of Russia’s current weakness to drive hard bargains, for cheap energy and increased exports to Russia, that benefit their own economies. Russia accepts this because its options have been limited by the global sanctions regime imposed by Western powers.

“This makes sense for Russia only as part of a war-fighting strategy in isolation from the West,” says Dr. Sonin. “Otherwise it’s a costly and inefficient economic strategy for Russia to pursue in the long term.”

Dr. Kapoor argues that there is only one way that the benefits of increased Indo-Russian trade can be permanently locked in.

“The best solution would be for Russia to make an early end to this war,” she says. “We can envisage a situation where Western companies have already exited the Russian market, and burned their bridges, while the Indian private sector no longer regards business with Russia as a risky proposition, carrying the threat of secondary sanctions. All that would go away for us, but we need to see an end to this war.”

Riaz Haq said...

Commerce Secretary Gina Raimondo said Wednesday that the U.S. is considering collaborating with India on certain manufacturing jobs in order to boost competition against China.

Raimondo told Jim Cramer on CNBC’s “Mad Money” that she will visit India in March with a handful of U.S. CEOs to discuss an alliance between the two nations on manufacturing semiconductor chips. The Commerce Secretary also revisited some of President Joe Biden’s comments on American manufacturing from his State of the Union address on Tuesday.

“We stopped making things,” Raimondo said. “I think, in 1990, there were like 350,000 people working in the chip industry in America. Now it’s like 160,000.”

Biden’s CHIPS and Science Act, signed into law in August, supplied $52 billion for U.S. companies to invest in chip manufacturing. The U.S. semiconductor industry employed more than 277,000 workers in 2021, according to the Semiconductor Industry Association, but it made 0% of the world’s supply of semiconductors as of September 2022.

In comparison, Taiwan and South Korea comprise 80% of the global foundry market for chips. TSMC, the world’s most advanced chipmaker, is also headquartered in Taiwan. But a collaborative effort between the U.S. and the Indo-Pacific “quad” region could lessen the global reliance on Taiwanese semiconductors. In September 2021, India, Japan and Australia announced plans to establish a semiconductor supply chain initiative to secure access to semiconductors and their components.

Raimondo said that India is “making a lot of the right moves.”

“It’s a large population. (A) lot of workers, skilled workers, English speakers, a democratic country rule of law,” she said.

But the Commerce Secretary said the southeast Asian nation must comply with labor standards as part of any deal, especially in light of India’s consumption of Russian oil. The G-7 countries, Australia and the European Union have issued price caps on the cost of Russian oil products to restrict the Kremlin’s access to a potential funding source for its war on Ukraine while still maintaining an oil supply on the global market.

“I’m running the Indo-Pacific economic framework,” Raimondo said. “So we have 13 countries including India. And we’re saying to them, look, sign up at the government-to-government level to labor standards, environmental standards, anti-corruption standards, rule of law standards. And in return, it’ll unlock U.S. business, U.S. capital jobs in India.”

Riaz Haq said...

U.S. Pursues India as a Supply-Chain Alternative to China

Biden administration turns to New Delhi as it seeks to steer critical technologies away from Beijing

The Biden administration is turning to India for help as the U.S. works to shift critical technology supply chains away from China and other countries that it says use that technology to destabilize global security.

Administration officials hosted meetings this week with a delegation of Indian officials and U.S. industry executives, seeking to facilitate technology development and investment in India as part of a broader U.S. push to cultivate alternatives to China.

Challenges arising from Beijing’s expanding global influence have had “a profound impact on the thinking in Delhi just as they have had on the profound impact on the thinking in other capitals,” White House national security adviser Jake Sullivan told reporters on Tuesday. “There is an element of that that forms a backdrop for the discussions here.”

The meetings come on the heels of an agreement with Japan and the Netherlands to start restricting exports of advanced chip-manufacturing equipment to China, joining efforts by the Biden administration to slow China’s military development by cutting access to advanced technologies.

U.S. officials hope those export restrictions create opportunities in India and elsewhere. While India isn’t among the world’s top producers of semiconductors, New Delhi has sought to assert itself as a greater semiconductor player. India is an appealing partner for industries looking to diversify their supply sources. With a population of 1.4 billion people, the country has a massive source of labor and costs are relatively low.

On Tuesday, the administration hosted a task force organized by the Semiconductor Industry Association, which is working in partnership with the Indian Electronics and Semiconductor Association, to develop a “readiness assessment,” aimed at trying to accelerate cooperation and investments. The meetings were attended by top American executives from a range of industries, including defense giant Lockheed Martin and semiconductor producer Micron, administration officials said.

India’s national security adviser, Ajit Doval, led New Delhi’s delegation this week in meetings with Mr. Sullivan and Commerce Secretary Gina Raimondo and other officials.

The meetings underscore a broader U.S. effort to meet challenges from China through alliances with other countries. The Biden administration has given priority to Washington’s relationship with what is known as the Quad—an alliance between India, Australia, Japan and the U.S. that has focused on countering Beijing.

“President Biden really believes that no successful and enduring effort to address any of the major challenges in the world today…is going to be effective without a close U.S.-India partnership at its heart,” a senior administration official said.

Riaz Haq said...

India's oil deals with Russia dent decades-old dollar dominance | Reuters

India in the last year displaced Europe as Russia's top customer for seaborne oil, snapping up cheap barrels and increasing imports of Russian crude 16-fold compared to before the war, according to the Paris-based International Energy Agency. Russian crude accounted for about a third of its total imports.

NEW DELHI/LONDON, March 8 (Reuters) - U.S.-led international sanctions on Russia have begun to erode the dollar's decades-old dominance of international oil trade as most deals with India - Russia's top outlet for seaborne crude - have been settled in other currencies.

The dollar's pre-eminence has periodically been called into question and yet it has continued because of the overwhelming advantages of using the most widely-accepted currency for business.

India's oil trade, in response to the turmoil of sanctions and the Ukraine war, provides the strongest evidence so far of a shift into other currencies that could prove lasting.

The country is the world's number three importer of oil and Russia became its leading supplier after Europe shunned Moscow's supplies following its invasion of Ukraine begun in February last year.


Some Dubai-based traders, and Russian energy companies Gazprom and Rosneft are seeking non-dollar payments for certain niche grades of Russian oil that have in recent weeks been sold above the $60 a barrel price cap, three sources with direct knowledge said.

The sources asked not to be named because of the sensitivity of the issue.

Those sales represent a small share of Russia's total sales to India and do not appear to violate the sanctions, which U.S. officials and analysts predicted could be skirted by non-Western services, such as Russian shipping and insurance.

Three Indian banks backed some of the transactions, as Moscow seeks to de-dollarise its economy and traders to avoid sanctions, the trade sources, as well as former Russian and U.S. economic officials, told Reuters.

But continued payment in dirhams for Russian oil could become harder after the United States and Britain last month added Moscow and Abu Dhabi-based Russian bank MTS to the Russian financial institutions on the sanctions list.

MTS had facilitated some Indian oil non-dollar payments, the trade sources said. Neither MTS nor the U.S. Treasury immediately responded to a Reuters request for comment.

An Indian refining source said most Russian banks have faced sanctions since the war but Indian customers and Russian suppliers are determined to keep trading Russian oil.

"Russian suppliers will find some other banks for receiving payments," the source told Reuters.

"As it is, the government is not asking us to stop buying Russian oil, so we are hopeful that an alternative payment mechanism will be found in case the current system is blocked."

Riaz Haq said...

Why Is Ukraine's Foreign Minister Visiting Pakistan?

Ukraine Arms Likely on Agenda
Pakistan, like many non-Western countries, says it’s adopted a neutral position in the Russia-Ukraine war. But, compared to other countries in the Global South, it’s an outlier in one big way: it’s been providing Ukraine with weapons. Nothing fancy — mainly artillery shells — but Kyiv is burning through massive amounts of firepower and will take ammunition from wherever it can get it. (The U.S. decision to provide Ukraine with cluster bombs makes the coalition’s desperation clear.)

Kuleba — who may be joined by Defense Minister Oleksii Reznikov — could ask for more arms during his visit, though that won’t be mentioned in any readout or local press reports.

The reason? Pakistan has yet to publicly acknowledge that it’s been providing Ukraine with arms. The weapons transfers have been covert, taking place indirectly through other European partners. The behind-the-scenes relationship was, however, acknowledged months ago by a European Union (EU) official in a television interview.

India AWOL on Ukraine
It does not appear that Kuleba will stop by New Delhi on this trip. Strikingly, Ukraine’s diplomatic engagement with India is taking place at a lower level. Emine Dzhaparova, the Ukrainian first deputy foreign minister, visited New Delhi in April. And last week, a mid-level Indian diplomat paid a visit to Ukraine.

India, whose leader Prime Minister Narendra Modi has made recent state visits to France and the United States — continues to remain an ally of Russia and has emerged as a major importer of Russian oil.

India is using its leadership of the G-20 this year to pronounce its rise as a global power. But it’s been absent when it comes to the biggest war Europe has seen since World War Two, seeing it as a sideshow. Indian Foreign Minister S. Jaishankar has been dismissive of the Ukraine war, calling it one of “Europe’s problems.”

For his part, Kuleba has harshly criticized New Delhi for its import of Russian oil. He said last August, “Every barrel of Russian crude oil delivered to India has a good portion of Ukrainian blood in it.” Months later, he said India was “benefit[ting] from our suffering,” and called on New Delhi to play a more diplomatic role in the war.

Insurance for the Pakistan Army
Though Kuleba’s visit to Islamabad was requested by Kyiv, it is important for Pakistan — especially its powerful army, which is behind the secret provision of arms to Ukraine. The Pakistan Army has been given a cold shoulder by Washington in the aftermath of the U.S. withdrawal from Afghanistan. By arming Ukraine, Pakistan is sending a message to Western powers courting India: we can still be useful to you.

The Pakistan Army is also under criticism domestically and internationally for its crackdown on the party of ex-cricketer Imran Khan.

Pakistani intelligence services have been forcing defections from Khan’s Pakistan Tehreek-e Insaf (PTI) party after violence targeting military installations that followed the violent arrest of the ex-cricketer by paramilitary forces on May 9.

This month, EU Ambassador to Pakistan Riina Kionka said that “the crackdown on PTI and supporters in the aftermath of May 9th is certainly something that we’re paying a lot of attention to.” Khan and others who remain with PTI could be tried under military courts.


Dr. Riina Kionka, European Union's ambassador to Pakistan, in an interview with local media in Pakistan on 21 February 2023 said that Pakistan has been helping Ukraine in its protracted conflict with Russia by sending military and humanitarian aid.[24]

Riaz Haq said...

#European companies suffer €100 billion hit from #Russia operations. Losses concentrated in #energy sector. #Germany is the biggest loser. #UkraineWar
Energy and utility groups have reported more than half the combined losses, according to FT analysis of direct impact of the Ukraine war

Europe’s biggest companies have suffered at least €100bn in direct losses from their operations in Russia since President Vladimir Putin’s full-scale invasion of Ukraine last year, according to analysis by the Financial Times.

A survey of 600 European groups’ annual reports and 2023 financial statements shows that 176 companies have recorded asset impairments, foreign exchange-related charges and other one-off expenses as a result of the sale, closure or reduction of Russian businesses.

The aggregate figure does not include the war’s indirect macroeconomic impacts such as higher energy and commodities costs. The war has also delivered a profit boost for oil and gas groups and defence companies.

Moscow’s decision to seize control of the Russian businesses of gas importers Fortum and Uniper in April, followed by the expropriation of Danone and Carlsberg last month, suggests more pain lies ahead, according to analysts.

More than 50 per cent of the 1,871 European-owned entities in Russia before the war are still operating in the country, according to data compiled by the Kyiv School of Economics. European companies still present in Russia include Italy’s UniCredit, Austria’s Raiffeisen, Switzerland’s NestlĂ© and the UK’s Unilever.

“Even if a company lost a lot of money leaving Russia, those who stay risk much bigger losses,” said Nabi Abdullaev, partner at strategic consultancy Control Risks. “It turns out that cut and run was the best strategy for companies deciding what to do at the start of the war. The faster you left, the lower your loss.”

The heaviest costs of withdrawal are concentrated in a few exposed sectors. Those with the biggest writedowns and charges are oil and gas groups, where three companies alone — BP, Shell and TotalEnergies — reported combined charges of €40.6bn. The losses were far outweighed by higher oil and gas prices, which helped these groups report bumper aggregate profits of about €95bn ($104bn) last year. Defence companies’ shares have been buoyed by the conflict.

Utilities took a direct hit of €14.7bn, while industrial companies, including carmakers, have suffered a €13.6bn blow. Financial companies including banks, insurers and investment firms, have recorded €17.5bn in writedowns and other charges.

Simon Evenett, economics professor at University of St Gallen, said: “You have a small number of companies which have taken a big hit. Once you get away from big ticket charges, the average writedown is probably fairly manageable given the limited Russian footprint.”

Looking at global investment flows into Russia, “even if Europeans were the only investors there, which they are not, the country would account for just 3.5 per cent of their total outward investments”, he said.

BP reported a $25.5bn charge, announcing three days after the invasion that it would sell its 19.75 per cent stake in state-owned oil group Rosneft.

It took TotalEnergies longer to report a total cost of $14.8bn. The French energy group has yet to write down its 20 per cent stake in the Yamal LNG project. Shell took a $4.1bn charge, while Norwegian oil and gas group Equinor and Austria’s OMV have reported €1bn and €2.5bn respectively.

German group Wintershall Dea in January said the Kremlin’s expropriation of its Russia business had wiped €2bn of cash from its bank accounts. In turn Wintershall’s owner BASF wrote down its stake in the energy explorer by €6.5bn.

Uniper, which was bailed out by the German state last year, booked €5.7bn in impairments, while Finland’s Fortum took a €5.3bn hit.

Riaz Haq said...

What lies behind arms talks between India’s Modi and Russia’s Putin?

Russia and India have a long history of collaborating on defence. What weapons have they traded before, and what will they discuss this time?

India’s prime minister, Narendra Modi, is making his first visit to Russia since the invasion of Ukraine to discuss issues that include defence and weapons deals.

The details of any new arms deals to be struck between the two countries have yet to emerge, but it is understood that Russia’s need for weapons and ammunition for the war in Ukraine is driving talks. Modi is able to offer substantial Indian industrial support to Russia for the Ukraine war in exchange for energy and military technology. The support would be practical but would stop short of India publicly backing Russia’s war effort.

What is the history of India-Russia defence deals?
For the past decade, India has focused on boosting its own military-industrial complex, telling international defence contractors that “Made in India” is a priority and saying technology transfers to Indian companies are a core part of any deal, whether with Russia or somewhere else.

However, India’s armed forces still rely heavily on armoured divisions and 97 percent of its 3,740 tanks are Russian-made.

While India has tried to diversify its defence purchases and partially wean itself off Russian arms, it is mainly Russian companies that are helping India’s defence industries mature at a rapid rate.

A day before Modi left for Moscow this week, Russia’s state export company, Rostec, signed an agreement to manufacture advanced armour-piercing “Mango” tank shells in India for the T-90 tank.

How else have India and Russia cooperated on defence before now?
Their defence cooperation has been substantial. The Brahmos supersonic antiship missile, for instance, was jointly designed by Indian and Russian engineers for the Indian armed forces and first tested in 2001.

Brahmos is the merger of the names of the Brahmaputra and Moskva rivers, signifying the cooperation between the two countries. The missile is fast and powerful and can deliver a 300kg (660lb) warhead at three times the speed of sound with an accuracy down to less than a single metre (3.3ft). It has since been exported to the Philippines.

Russian joint ventures with India also include making 35,000 Kalashnikov AK203 assault rifles for the Indian army, the licensed production of advanced T-90 tanks and Sukhoi Su-30-MKI fourth-generation fighter jets and maintenance facilities for India’s MiG-29 fighter jets. They also collaborate on making the Konkurs antitank guided missile.

What else will Modi and Putin discuss?
Cheap Russian oil has been a mainstay of India’s economy for more than a year. It has been a major recipient of US- and EU-sanctions-busting petroleum shipments.

Nuclear power is also on the cards at the talks in Moscow. Several of India’s nuclear reactors are Russian-built, and talks are ongoing for India to buy both Russian floating and maritime nuclear reactors, useful for remote areas and also for submarines and larger, longer-range naval vessels.

Where will Russia source weapons it needs for war in Ukraine?
Moscow is desperate to fulfil its armed forces’ constant demand for artillery and tank ammunition of all types for its war in Ukraine.

Russia’s armed forces conservatively fire 8,000 rounds per day. At an average cost of $4,000 each, Russia is spending $32 million every single day in its effort to break the deadlock on Ukraine’s battlefields.

Riaz Haq said...

What lies behind arms talks between India’s Modi and Russia’s Putin?

Russia and India have a long history of collaborating on defence. What weapons have they traded before, and what will they discuss this time?

While Russia’s economy is technically on a war footing, Putin has still needed to court North Korea and Vietnam, both operators of Russian-calibre artillery, and both with large domestic munitions factories, especially for the much-needed 152mm shell.

With continued support for Ukraine being questioned in the United States and European and Turkish munitions factories picking up the slack, Ukraine and Russia are now increasingly reliant on other countries for help in providing the vast amounts of ammunition needed to keep the other at bay.

Both countries are seeking new partners in the hopes of outproducing the other and bringing the intense firepower they think is needed to turn the tide in what has become a static conflict. Russia is hoping that, along with North Korea and Vietnam, Indian industry can help provide Russia with the tools it needs to defeat Ukraine.