Wednesday, June 1, 2022

Russia Sanctions: India Profiting From Russian Oil Trade by Exporting Refined Petroleum

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. As Pakistani Finance Minister Miftah Ismail told CNN's Becky Anderson in an 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 told journalists: “You are seeing that they (western nations) keep bossing us and you (journalists) also encourage them. Every day, they come up with new issues. We used to call them development partners. They do not pay for the development but keep giving advice.” “We do not want to get into any problem. We want peace in the world,” 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 is openly funding the war in Ukraine by buying weapons and oil 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. 

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Ukraine's Muslims Oppose Russia


40 comments:

Ahmed said...

Dear Sir

Either America must take actions against India for violating the terms and conditions of the sanctions imposed on it or America must allow Pakistan to import oil from Russia .

Ahmed said...

Another important point , I think the reason why America is turning a blind eye to India is because America knows very well that India can be a great threat to its enemy China .

Indo said...

Factbox-Who is buying Russian crude oil and who has stopped​

https://www.investing.com/news/commodities-news/factboxwho-is-buying-russian-crude-oil-and-who-has-stopped-2831928


CURRENT BUYERS

BHARAT PETROLEUM

Indian state-run refiner Bharat Petroleum Corp Ltd has bought 2 million barrels of Russian Urals for May loading from trader Trafigura, two people familiar with the purchase said.

The company regularly buys Russian Urals for its 310,000 barrels per day (bpd) Kochi refinery in southern India.

HINDUSTAN PETROLEUM,

India's state refiner bought 2 million barrels of Russian Urals for May loading, according to trading sources.

INDIAN OIL CORP

India's top refiner has bought more than 6 million barrels of Urals since Feb. 24 and has a supply contract with Rosneft for up to 15 million barrels of Russian crude in 2022.

ISAB

Italy's largest refinery, owned by Lukoil-controlled Swiss-based Litasco SA, continues to buy Russian crude, while the Italian government has been looking into the possibility of temporarily nationalising ISAB.

LEUNA

The land-locked Leuna refinery in eastern Germany, majority-owned by France's TotalEnergies, continues to buy Russia crude fed by the Druzhba pipeline.

MANGALORE REFINERY AND PETROCHEMICALS

The state-run Indian refiner has bought 1 million barrels of Russian Urals crude for May loading via a tender from a European trader, a rare purchase driven by the discount offered.

MIRO

Germany's largest refinery, 24% owned by Russia's Rosneft, continues to buy Russian crude, which accounts for about 14% of the total intake..

MOL

The Hungarian oil company has said it would take at least 2-4 years to fully switch its two refineries in Slovakia and Hungary to alternative crude processing, which currently accounts for about 35% of total intake.

NAYARA ENERGY

The Indian private refiner, part-owned by Rosneft, has purchased Russian oil after a gap of a year, buying about 1.8 million barrels of Urals from Trafigura.

NEFTOCHIM BURGAS

A Bulgarian refinery, owned by Russia's Lukoil, continues to refine Russian crude, which accounts for about 50% of its intake, according to government officials.

PCK SCHWEDT

Germany's PCK Schwedt refinery, 54% owned by Rosneft, continues to buy Russian crude fed via the Druzhba pipeline.

German government officials have said they were looking to replace Russian crude with alternative imports via the German port of Rostock or via ports of neighbouring Poland to keep the refinery running.

PERTAMINA

Indonesian state energy firm PT Pertamina is considering buying crude oil from Russia as it seeks oil for a newly revamped refinery.

SINOPEC

China's state-run Sinopec (NYSE:SHI), Asia's largest refiner, is continuing to purchase Russian crude under previously signed long-term contracts.

FORMER BUYERS

BP (NYSE:BP)

The British oil major has exited Russia and said it would no longer make new deals with Russian entities for loading at Russian ports unless "essential for ensuring security of supplies".

ENEOS

Japan's biggest refiner has stopped buying crude oil from Russia, and plans to source alternative supplies from the Middle East.

ENI (BIT:ENI)

The energy group, 30.3% owned by the Italian government, has suspended purchases of Russian oil, including for Germany's Bayernoil refinery, where it has a minority stake.

EQUINOR

Norway's majority state-owned energy firm has stopped trading Russian oil and exited Russia, recording a $1.08 billion impairment in its first-quarter earnings report

GALP

The Portuguese oil and gas company has suspended all new purchases of petroleum products from Russia or from Russian companies.

GLENCORE

The global mining and trading firm said it would not enter any new trading business relating to Russian-origin commodities unless directed by the relevant government authorities.

Riaz Haq said...

Russian Oil Producers Stay One Step Ahead of Sanctions
Shippers and refiners hide origin of Russian oil, and some is getting into the U.S.

https://www.wsj.com/articles/russian-oil-producers-stay-one-step-ahead-of-sanctions-11654076614

Indian refined oil-product exports, beefed up by cheap Russian supplies, have grown sharply since the beginning of the war. Daily shipments to Europe have risen by a third and by 43% to the U.S. on a quarterly basis.

“If Indian refineries on the west coast have been importing lots of Russian crude then yes, probably there will be some Russian crude that has gone into the making of these products,” said Koen Wessels, an oil-products analyst at consulting firm Energy Aspects.

This comes at a time when gasoline and diesel prices have hit records in the U.S. due to high crude prices, weighing on consumers at a time when inflation was recently at a four-decade high. Extra supply from abroad may be less scrutinized, analysts said.

-------

Europe just targeted Russian crude with its toughest sanctions yet, but shippers and refiners are getting the oil to market by obscuring its origins. Some fuels believed to be partially made from Russian crude landed in New York and New Jersey last month.

The cargoes were brought through the Suez Canal and across the Atlantic from Indian refineries, which have been big buyers of Russian oil, according to shipping records, Refinitiv data and analysis by Helsinki-based think tank Centre for Research on Energy and Clean Air.

In the wake of the invasion of Ukraine and sanctions from the U.S. and the European Union, traders are working to obscure the origins of Russian oil to keep it flowing. The oil is being concealed in blended refined products such as gasoline, diesel and chemicals.

Oil is also being transferred between ships at sea, a page out of the playbook used to buy and sell sanctioned Iranian and Venezuelan oil. The transfers are happening in the Mediterranean, off the coast of West Africa and the Black Sea, with oil then heading toward China, India and Western Europe, according to shipping companies.

A refinery owned by Indian energy giant Reliance Industries Ltd. bought seven times more Russian crude in May, compared with prewar levels, making up a fifth of its total intake, according to Kpler.

Reliance chartered an oil tanker to carry a cargo of alkylate, a gasoline component, departing from the nearby Sikka port on April 21 without a planned destination. Three days later, it updated its records with a U.S. port and sailed over, discharging its cargo on May 22 in New York.

“What likely happened was Reliance took on a discounted cargo of Russian crude, refined it and then sold the product on the short-term market where it found a U.S. buyer,” said Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air. The organization is tracking Russian fossil fuel exports and their role in funding the Ukraine war. “It does look like there’s a trade where Russian crude is refined in India and then some of it is sold to the U.S.”

Reliance didn’t respond to a request for comment. Its joint chief financial officer, Srikanth Venkatachari, said in a May 6 briefing that the company has minimized feedstock cost by sourcing “arbitrage barrels.”

SAMIR SARDANA said...

For those who though that Buying Russian Oil reduced the local oil rates in India.The cut in fuel rates was due to a CUT in Additional Excise Duty (AED)

The AED is NOT SHARED BY THE GOI WITH THE STATES ! The Indian states LIVE on the VAT on Oil !The Indian states are BUST - and have NO SCOPE to cut VAT ! HENCE,THE GOI HAS CUT AED TO REDUCE INFLATION !

THE IMPORTED RUSSIAN OIL IS ENTIRELY EXPORTED ! IT HAS NO IMPACT ON LOCAL FUEL RATES !

ONLY THE PRIVATE INDIAN REFINERS ARE IMPORTING RUSSIAN OIL - AS INDIAN OIL PSUs,HAVE THE FEAR OF SANCTIONS !

Granted that the Indian Oil PSUs have locked in Long term contracts for Oil Sourcing - but Chonese Oil PSUs like Sinopec & Zhenhua are buying Russian Disc Oil.Zhenhua is a trader ! Indian PSUs can declare Force Majeure - but they ain't.OR THE INDIAN OIL PSUs - CAN BUY RUSSIAN OIL VIA A TRADER - SO THAT SANCTIONS FALL ON THE TRADER (as even EU and other nations.as of today are refining Russian Oil)

But NOT India ! In India,Private companies are TAKING FULL ADVANTAGE OF the GOI Foreign Policy - to REDUCE THEIR PROCUREMENT COSTS & DUMP DIESEL ABROAD - TO EARN SUPER PROFIT, SOLELY DUE TO THE ABILITY OF THE GOI TO NAVIGATE US SANCTIONS !

But the same Indian Private players are not even OFFSETTING THE EXPORT superprofits,with domestic sales. & THERE IS NO SUPERPROFIT TAX ON THESE REFINERS - AS THIS DISCOUNTED OIL & EXPORTED DIESEL PROFIT - IS DUE TO NO INTELLECTUAL ACUMEN,OR STRATEGIC TIMING.

THE GOI BANNED STEEL EXPORTS VIA EXPORT TAX - BUT NO EXPORT TAX ON FUEL EXPORTS !

Y ?

If India buys 300 million barrels of Russian Discounted Oil via the private players and they refine and export as diesel - that is 9 Billion USD

So Y is the GOI NOT doing this,VIA the Oil PSUs ?

MAD = MODI AMBANI DEAL !

This 9 Billion USD is the sinking fund, for the Lok Sabha Polls

And the US is NOT sanctioning the Indian Pvt Oil companies - as MODI is protecting them !

And the people of India are suffering, the High Oil Prices and the Banias are lining their pockets - JUST LIKE DEMO/GST.........

Indians must be MAD to accept this farce of a democracy, and distorted capitalism !

BUT IS IT RUSSIAN LOVE FOR RAJ KAPOOR AND INDIA - THAT THEY ARE SELLING OIL, AT STEEP DISC ?

NEIN !

NAYARA = RUSSIA ! NAYARA IS OWNED BY RUSSIA - WHO ARE THE OWNERS OF THE VC WHICH HAS INVESTED IN NAYARA ? THE REAL OWNERS !

IS RELIANCE USING NAYARA AS THE PRETEXT TO ALSO PILE INTO THE RUSSIAN OIL SUPERPROFIT - AND Y IS THE US/EU NOT SANCTIONING NAYARA ? COZ - THEN US WILL HAVE TO SANCTION MODI -ID.EST., RELIANCE ! dindooohindoo

THIS IS MAKE IN INDIA - CHAIWALA STYLE !

SAMIR SARDANA said...

PAKISTAN CAN ALSO IMPORT RUSSIAN CRUDE - BUT NOT DIRECTLY - IT HAS TO BE VIA CHINA!

China is using SOE Commodity firms to buy Russian Oil,and NOT the CHINESE SOE, who are refiners - so that sanctions risk, is mitigated.Petro China has stopped Russian Imports

China also has a 2-3 MPBD Oil Pipeline from Russia - SO PRC CAN PLAY WITH RUSSIAN SUPPLIES - AND CHINA IS USING CHINESE FLAGGED SHIPS, TO IMPORT THE OIL,FROM BALTIC PORTS - AND SO.,THERE IS ENOUGH SUPPLY CHAIN DEXTERITY,AND FLEXIBILITY.

THEREFORE, PRC CAN USE SOE COMMODITY FIRMS,OR PRIVATE TRADERS, IN CHINA (AS EU AND US TRADERS HAVE EXITED RUSSIA),TO IMPORT DISC RUSSIAN OIL - REFINE IT IN CHINA, AND EXPORT THE PETROL AND DIESEL,TO PAKISTAN, AT DISCOUNTED RATES !

THERE IS NO SANCTION ON CHINESE FUEL EXPORTS !

EVEN IF THERE ARE SANCTIONS IT WILL ON SOME SMALL TRADING HOUSE

CHINESE SOE REFINERS HAVE UNUSED CAPACITIES (due to COVID)

PAKISTAN WILL IMPORT REFINED PRODUCTS AND SO WILL SAVE ON CONVERSION COSTS,CONVERSION ENERGY AND FREIGHT COSTS

THE REFINED PRODUCTS WILL BE EXPORTED TO GWADAR IN CHINESE FLAG SHIPS !

IF REFINED PRODUCTS ARE IMPORTED - IT WILL BE A G2G DEAL - AND SO,NO LC IS REQUIRED,AND A YUAN IMPORT DEAL CAN BE STRUCK,OR A PKR-YUAN AGREEMENT,CAN BE STRUCK.

PAKISTAN REFINERS CAN DO AN UNPLANNED MAINTENANCE - and go on vacation for some time - to Hainan ! ALSO,PAKISTAN REFINERS MAY NOT BE DESIGNED TO REFINE RUSSIAN CRUDE.dindooohindoo

JIYE JIYE PAKISTAN !

SAMIR SARDANA said...

Pakistan has many options to import Russian Crude - IF IT WANTS (as refined fuels are covered in above)

No Pakistan PSU will import, the crude - as it may face sanctions

So - only a Private refiner, will import

Next Problem is payment.With the Moody's love note,Pakistan Bank LCs may need to be confirmed by US/EU/Asian banks

No US/EU bank will confirm a Habib LC to import Russian Crude.Even if CCB or Bank of China in HK or Singa or Shanghai confirms the LC - the US/EU might block the ship in high seas.
Even if the flag is Chinese - the US Navy might block it - as the consignor is Russia,and Consignee Is Pakistan - and PRC is not involved.

In any case,US/EU Banks will use SWIFT - which can choke off the LC any time

SOLUTION

Use a Chinese SOE Commodity trader,to import the Russian Crude - so the consignee is PRC - and so,no NATO SHIP will block the ship.It will carry Chinese Flags.

On the High Seas,the Chinese Consignee,will sell the cargo on high seas,to Pakistan.

Now the Payment.Habib bank will issue a Transferable and Divisible LC to the Chinese trader - who will transfer it to Russia.The LC will be in YUAN ! Russia will get YUAN,via CIPS,and the LC will be retired or negotiated in China,in Yuan,and so,Pakistan will remit Yuan - so no impact on USD/PKR.

RUSSIA NEEDS YUAN - AS CHINA IS THE ONLY NATION,WHICH CAN STAND UP TO THE US/EU,AND SUPPLY ARMS,ORDINANCE,FOOD,PHARMA,SEMICONDUCTORS,RARE EARTHS ETC. TO RUSSIA - IN THESE TIMES.SO RUSSIA HAS AN IMMEDIATE USE,FOR THE YUAN !

IT IS A WIN-WIN-WIN FOR PAKISTAN-RUSSIA AND CHINA !

OIL HAS CEMENTED PAKISTAN-RUSSIA AND CHINA ! dindooohindoo

SAMIR SARDANA said...

PROVIDENCE IN PAKISTAN HAS LED TO 2 FUEL HIKES, & THERE WILL BE GAS & POWER HIKES & RISE IN FOOD AND FERTILISER SUBSIDIES !

PAKISTAN CANNOT AFFORD A CONFLAGRATION, AT THE BORDER - DUE TO THE ABOVE,AND THE TRAP OF IMF AND FATF ! BUT MODI NEEDS A DIVERSION FROM THE ECONOMY & INFLATION

MODI CAN START A WAR !

AS OF NOW,EVERYTHING IN PAKISTAN IS PRICED FOR PERFECTION ! THE SPANNER IS MODI & A CIVIL UNREST IN PAKISTAN (DUE TO INFLATION) !

WHICH WILL THEN LEAD TO THE "GRAND BARTER" = LOAN WAIVERS & GRANTS IN THE BILLIONS FOR PAKISTAN WITH A SWAP FOR THE NUKES

CHINA IS THE "ONLY" SOLUTION.

AND CIPs IS THE WAY

ROUTE RUSSIAN IMPORTS VIA CHINESE TRADERS IN G2G DEALS IN YUAN.RUSSIA WILL USE THE YUAN TO IMPORT FROM PRC -- AND PAKISTAN WILL PAY ON DA BASIS,TO CHINA IN YUAN - WITH NO LC - AND SO,NO PRESSURE ON PKR/USD.

THIS WILL NULLIFY THE MOODY'S LOVE NOTE.

RUSSIAN OIL TRADES,IS A CHANCE TO EXPONENTIALLY GROW THE CIPS - ACROSS THE WORLD - WITH THE LYNCHPIN BEING RUSSIAN COMMODITIES.IT CAN ALSO EXPONEN INCREASE OIL TRADES IN YUAN.

THIS RUSSIA-CHINA-PAKISTAN TRIAD IS A WIN-WIN-WIN.dindooohindoo


SAMIR SARDANA said...

People are missing out,the Russian oil trade model,with Nayara in India.

Nayara = Russia

SO RUSSIA IS EXPORTING DIESEL VIA NAYARA IN INDIA USING RUSSIAN OIL ! SO THE DISCOUNT ON THE RUSSIAN SALE DOES NOT MATTER !

WHAT SANCTIONS !

THIS IS THE MODEL !

RUSSIA EXPORTS COMMODITIES TO CHINA AND PAKISTAN (VIA CHINA).BEFORE THAT RUSSIA TAKES EQUITY STAKES IN THE USERS OF THE COMMODITIES AT A VALUATION (ON PRE-COMMODITY SALE BASIS)

RUSSIA DOES NOT INJECT ANY CAPITAL

ALL SALES ARE IN YUAN

AFTER THE 1ST SALE - THE CHINESE/PAKISTANI USER,MAKES THE 1ST CALL NOTICE ON THE EQUITY ALLOTTED TO RUSSIA.THIS CALL NOTICE,IS MET MY APPROPRIATING,5% OF THE SALE VALUE OF THE COMMODITIES,BY RUSSIA.

THEREAFTER,THE COMMODITIES ARE PROCESSED AND SOLD/EXPORTED,AND RUSSIA GETS A STAKE IN THE PROFIT,AND AFTER 5 YEARS,THE LOCAL PLAYER BUYS OUT,THE RUSSIAN STAKE.

SO RUSSIA RECOVERS THE DISCOUNT IN THE SALE OF COMMODITIES AND OIL - BY SEVERAL TIMES, AND THE MONEY IS IN YUAN AND IN CHINA - THE SAFEST HUB - WHERE NO FREEZE WILL WORK - AND THE YUAN WILL STRENGTHEN VIS--VIS THE USD IN 5 YEARS.

THIS IS ALSO THE MODEL TO BE USED WITH PAKISTAN-RUSSIA - AND TO THE EXTENT THAT PAKISTAN CAN EXPORT FOOD,DRUGS AND ORDINANCE TO RUSSIA - THE TRADE CAN BE IN PKR

IS THIS THE TIME FOR RUSSIA TO LICENSE MILITARY TECH,TO PAKISTAN ORDINANCE,FOR MASS PRODUCTION AND EXPORT TO RUSSIA - VIA CHINA ? dindooohindoo

OPPORTUNITIES !

Riaz Haq said...

Handle the India-U.S. Relationship With Care
The world’s largest democracy often sees things very differently than America.

By Walter Russell Mead

https://www.wsj.com/articles/india-handle-with-care-modi-china-russia-narendra-democracy-hindu-america-blinken-11654539987


Superficially, the U.S.-India relationship looks like a success. With both countries focused on China, business ties steadily deepening, and U.S.-Pakistan relations in a deep freeze, many of the old obstacles to the relationship have disappeared.

But an intense week of meetings in Bangalore and Delhi with politicians, think tankers, religious leaders and journalists made clear that while Americans and Indians share strategic and economic interests, and we both value democracy, we remain divided by important differences in values and perceptions. Unless managed carefully, these differences could derail U.S.-India cooperation at a critical time.

Americans and Indians often see the same problem in very different ways. India, for example, does not see Russia’s attack on Ukraine as a threat to world order. While Americans have been disturbed by India’s continued willingness to buy oil from Russia, Indians resent the West’s attempt to rally global support for what many here see as a largely Western problem in Ukraine. Pointing out that Europeans scarcely noticed China’s attacks on Indian frontier posts in 2020, Foreign Minister Subrahmanyam Jaishankar told a conference in Bratislava, Slovakia, last week that “Europe has to grow out of the mindset that Europe’s problems are the world’s problems.”

More generally, Indians bristle when they sense Americans and Europeans getting together to write global rules. The more that American Wilsonians talk about a values-based international order, the more that Indians worry about Western arrogance. Many Indians want a strong Russia and, within limits, a strong China precisely to help guard against the kind of world order President Biden and many of his advisers want to build.

This is more than the postcolonial suspicion of Western intentions that India has long shared with many other non-Western countries. The Hindu nationalist movement that has replaced the long-ruling Congress Party with a new political system built around the Bharatiya Janata Party and its charismatic leader, Narendra Modi, has brought a new dynamism to Indian foreign policy. This new nationalist India wants to increase and develop Indian power, not submerge Indian sovereignty in Western-designed international institutions.

The domestic agenda of the Hindu nationalist movement can also cause problems for the U.S.-India relationship. For Hindu nationalists, the rule of the Muslim Mughal emperors, some of whom destroyed ancient Hindu temples and built mosques on their ruins, was as much a disaster as British colonialism for Indian civilization. It is not enough to send the British packing; the liberation of India means placing Hindu civilization back at the center of Indian cultural and political life. Many BJP supporters want the Indian government to defend India’s Hindu civilization and culture from Islam, Christianity and Western secular liberalism.

Riaz Haq said...

Handle the India-U.S. Relationship With Care
The world’s largest democracy often sees things very differently than America.

By Walter Russell Mead

https://www.wsj.com/articles/india-handle-with-care-modi-china-russia-narendra-democracy-hindu-america-blinken-11654539987

This form of Hindu nationalism leads to controversial policy initiatives. Tough restrictions on the ability of foreign organizations to fund civil-society groups in India threaten to disrupt the activities of American charities ranging from the Ford Foundation to the Catholic Church. Anti-conversion laws put obstacles in the path of both Christian and Muslim missionary efforts, and Hindu women wishing to marry out of the faith sometimes face severe social and governmental pressures. Communal violence, a problem in India since the days of the British raj, has risen in recent years. Indian Muslims often express fears for their personal security.

American human-rights groups have responded to these developments with increasing concern, and last week Secretary of State Antony Blinken named India as a country “where religious freedom and the rights of religious minorities are under threat.” Such statements do more to trigger anticolonial and anti-Western sentiments than to relieve minority communities. Hindu nationalism is, among other things, a demand that Indian civilization be accepted as the moral and spiritual equal of the West. America has its racial problems and mass shootings, Indians say. What gives Americans the right to tell India how to live?

These conflicts aren’t going away and will likely get worse over time. Hindu nationalism is here to stay. So are India’s communal tensions, and so too for that matter is the belief of many Americans that they have a solemn duty to tell people in other countries and cultures how to live—and to impose sanctions on those unhappy occasions when they fail to take our advice. If bilateral relations are to prosper, Indians and Americans need to find better ways to manage these chronic issues.

India and the U.S. are raucously democratic societies, and their foreign policies cannot ignore public opinion. Managing this critical relationship is never going to be easy. Building deeper ties between the two societies will help; so too will quiet, low-key conversations aimed at preventing blowups before they occur. Both sides need this relationship; we both need to focus on making it work.

Riaz Haq said...

China and India buy more Russian oil, blunting Western sanctions
Both countries take advantage of discounts as buyers disappear


https://asia.nikkei.com/Business/Energy/China-and-India-buy-more-Russian-oil-blunting-Western-sanctions

TOKYO -- China and India have increased Russian oil purchases as prices decline due to Western import bans, the latest data shows, creating a loophole that allows Moscow to secure export revenue.

China imported 800,000 barrels of Russian petroleum daily by sea last month, according to data from Refinitiv, a figure that does not include oil delivered via pipelines. The volume has soared by more than 40% from January.

The number indicates that China is deliberately going after cheap Russian crude. India's marine imports of Russia's oil also spiked from zero in January to nearly 700,000 barrels a day in May.

China and India have expanded imports because "Western sanctions have reduced the number of buyers, meaning Russian crude oil can be purchased cheaply," said Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., the state-backed energy explorer known as JOGMEC.

Following similar action by the U.S., the European Union agreed to ban imports of Russian oil last week, immediately halting imports on two-thirds of the petroleum. The bloc plans to end roughly 90% of purchases by year's end. More companies in Western economies are shying away from procuring Russian oil as well.

As a result, Russia's Urals crude, mostly bound for the European market, currently trades around $90 a barrel. In contrast, the Brent crude international benchmark sells about $35 higher.

Russia's ESPO crude -- mostly exported to Asia -- costs around $94 per barrel, roughly $20 below Dubai crude, which serves as Asia's benchmark. The prices differed by just a few dollars at the start of the year.

But the price of Urals crude has gained roughly 30% since a year earlier. The rise in international oil prices is one factor, and the growing imports by China and India buttress Russian oil prices amid the sanctions.

Russia's revenue from oil exports between January and April has climbed 50% on the year, the International Energy Agency said.

Russian coal benefits from a similar dynamic. Despite Western import bans, the price hovered around $148 a ton in late May, according to data from Argus Media, based on assessments at Baltic ports.

Though the value is well below the roughly $330 a ton for ICE Rotterdam coal futures in that period, Russian coal is still double the price from a year earlier. India, China and a few other importers have helped propped up the product.

For liquefied natural gas, Asian prices are in the mid-$20 range per 1 million British thermal units, but China-bound Russian LNG is "being traded at a significant discount," said Toshiyuki Makabe, managing director of commodities sales at Goldman Sachs.

Beijing's purchases of Russian LNG during May were in line with year-earlier volume, due largely to China's COVID lockdowns, but imports could rise again this summer on air conditioning demand. There are reports of Indian buyers purchasing Russian LNG on the spot market.

Meanwhile, pipeline deliveries of Russian gas to Europe have diminished only by a limited extent apart from halted supplies to Poland. These LNG sales do not appear subject to the types of discounts seen in Asia.

The U.S. and Europe are urging China and India to refrain from buying Russian oil and coal. But cheap Russian supplies present an enormous economic advantage given the soaring global energy prices.

India's Ministry of Petroleum and Natural Gas said last month that "energy purchases from Russia remain miniscule in comparison to India's total consumption." Pulling back from Russian imports "will lead to further volatility and instability, jacking up international prices," the ministry warned.

Riaz Haq said...

Richard Walker
@rbsw

THREAD
INDIA’S DILEMMA: New 3-part series

The world needs to think about India

Delhi is under severe geopolitical pressure:
- Reliant on Russia
- Threatened by China
- Wary of the West

Now Russia’s war on Ukraine is forcing Delhi to face up to some massive choices

1/

https://twitter.com/rbsw/status/1535277477337219074?s=20&t=Kn_-1ia986Il4iY26P7upw

--------------

INDIA’S DILEMMA
Part 1: Russia Goes Rogue

India is under huge pressure to break with Russia over its war on Ukraine.

Russia is a key supplier of arms and defence tech. But as the war pushes it closer to China, there are growing calls for a rethink.

https://youtu.be/9ASkO-f0wFM

-------------------------

INDIA’S DILEMMA
Part 2: The China Threat

The Chinese threat to India is totally under-reported
- World’s largest territorial dispute
- China claims an entire Indian state
- 2020 clashes killed 20, still unresolved
- India fears being surrounded

3/

-----------

INDIA’S DILEMMA
Part 2: The China Threat

Watch part 2 in full ->

https://youtu.be/Iz_JdQSrzBg

4/

---------------

INDIA’S DILEMMA
Part 3: The Call of the West

West wants India to join democratic pushback against authoritarians

India needs friends

Why not get together?
- India sees West as lecturing & hypocritical
- Demands access to defence tech
- West has deep concerns over Modi govt

5/

--------------

INDIA’S DILEMMA
Part 3: The Call of the West

Watch Part 3 in full ->

https://youtu.be/OshZy7fhJKo

6/

Riaz Haq said...

Stephen Stapczynski
@SStapczynski
Europe's campaign to quit Russian fuel plunges Pakistan into darkness ����⚡

EU's energy policy is designed to punish Moscow for the war in Ukraine. But it's also wreaking havoc thousands of miles away as Pakistan grapples with a gas shortage

https://twitter.com/SStapczynski/status/1536533469807132672?s=20&t=F1kOE5uVA2NGxqqCUeG68g

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Europe's campaign to quit Russian fuel is designed to punish Moscow for its invasion of Ukraine. It's also wreaking havoc thousands of miles away from the conflict, plunging Pakistan into darkness, undermining one regime and threatening the stability of the country's new leadership.
A decade ago, the world's fifth-most populous country took specific steps to insulate itself from the kinds of violent price spikes that are roiling the market today. It made a massive investment in liquified natural gas and signed long-term contracts with suppliers in Italy and Qatar. Now some of those suppliers have defaulted, though they continue to sell into the more lucrative European market, leaving Pakistan in exactly the position it tried so hard to avoid.

In order to avoid blackouts during the Eid holiday last month, the government paid nearly $100 million to procure a single LNG shipment from the spot market, a record for the cash-strapped nation. In the fiscal year ending July, the country's costs for LNG could top $5 billion, twice what they were a year ago. Even so, the government can't cushion the blow for its citizens: The International Monetary Fund is in talks to bail out the nation with a key condition that it cuts fuel and electricity subsidies.

Now parts of Pakistan are experiencing planned blackouts of more than 12 hours, limiting the effectiveness of air conditioning to offer relief during the ongoing heatwave. The previous prime minister continues to draw large crowds to rallies and protests, amplifying citizens' anger about inflation that's rising at 13.8%. Prime-time talk show hosts regularly discuss how Pakistan will get the fuel it needs, and how much it will have to pay.

Last week, the government announced a new raft of energy-saving measures. Civil servants were released from regular Saturday shifts, and the budget for security personnel was slashed 50%.

"I am acutely aware of the hardships people are facing," Prime Minister Shehbaz Sharif said in a tweet in April ahead of the Eid holiday. He ordered his government to resume purchasing expensive overseas natural gas shipments that same week. And earlier this month he warned that they don't have enough money to continue buying gas from overseas.

The supply crunch will go beyond blackouts. The government has redirected existing natural gas supplies to power plants, short-changing fertilizer makers that depend on the fuel as a feedstock. That move could threaten the next harvest, leading to even higher food costs next year. Cellphone towers are using backup generators to sustain service through the blackouts, but they too are running out of fuel.

There's little reprieve on the horizon. The cost of LNG has surged by more than 1,000% in the last two years, first on post-pandemic demand, then on the Russia invasion of Ukraine. Russia is Europe's biggest supplier of natural gas, and the threat of supply disruptions sent spot rates to a record in March.



https://www.ndtv.com/world-news/pakistans-12-hour-blackouts-linked-to-a-massive-shift-in-europe-3064863

Riaz Haq said...

Meanwhile, Europe has been demanding more and more LNG. So far this year, Europe's LNG imports are up 50% from the same period last year and aren't showing any sign of slowing down. Policymakers in the European Union drafted a plan to significantly increase LNG deliveries as an alternative to Russian gas as they break ties with President Vladimir Putin's regime over the war in Ukraine. Countries like Germany and the Netherlands are fast-tracking the construction of floating import terminals, with the first ones slated to start within the next six months.

https://www.ndtv.com/world-news/pakistans-12-hour-blackouts-linked-to-a-massive-shift-in-europe-3064863

"Europe is sucking LNG" from the world, said Steve Hill, executive vice president at Shell Plc, the world's top trader of the fuel. "But that means less LNG will go to developing markets."

Not long ago, Pakistan represented the future for the LNG industry. By the mid-2010s, demand for the fuel, gas cooled to 162 degrees Celsius so it can be shipped around the world via tanker, had plateaued in developed markets. But technological advancements had brought down the costs and construction times for import terminals, and new gas fields cut the prices of the fuel itself.

At the new, lower prices, poorer countries could finally consider the fuel. Suppliers set their sights on these new markets, and when Pakistan issued a tender for long-term LNG supplies, more than a dozen companies bid for its business.

In 2017, Pakistan selected Italy's Eni SpA and trading house Gunvor Group Ltd to supply the country with LNG into the next decade. At the time, the terms were considered good, and the prices were lower than a similar contract signed with Qatar the previous year.

Now, though, the two suppliers have canceled more than a dozen shipments scheduled for delivery from October 2021 through June 2022, coinciding with the surge in European gas prices.

Such defaults are almost unheard of in the LNG industry, said Bruce Robertson, an analyst at the Institute for Energy Economics and Financial Analysis. Traders and industry insiders interviewed by Bloomberg couldn't remember the last time so many cargoes were scrapped without being directly related to a major outage at an export facility.

Eni and Gunvor have said they had to cancel because they're facing their own shortages and don't have the LNG to send to Pakistan. Typically when exporters face those kinds of challenges, they replace the deliveries by buying a shipment on the spot market, but Eni and Gunvor haven't done that.

Gunvor declined to comment for this story. Eni's supplier didn't meet their obligation, and was therefore forced to default on shipments to Pakistan, the Italian company said in an emailed statement, also noting that it did not take advantage or benefit from the cancellations and applied all contractual provisions to manage such disruptions.

Suppliers are usually loathe to cancel. It damages the business relationship, and it's often very, very expensive. Developed markets typically demand "failure to deliver" penalties of up to 100%. According to Valery Chow, an analyst at Wood Mackenzie Ltd., "it's very rare for LNG suppliers to renege on long-term contracts beyond force majeure events."

Pakistan's contracts called for a more modest 30% penalty for cancellation, most likely in exchange for lower prices overall. At this point, prices in the European spot market are high enough to more than offset those penalties. An LNG shipment for May delivery to Pakistan via a long-term contract would cost $12 per million British thermal units, according to Bloomberg calculations. For comparison, a May delivery spot cargoes to Europe were being traded at over $30. Eni and Gunvor have continued to meet their commitments to clients there.

Riaz Haq said...

So now Pakistan is back to the drawing board, in a worse negotiating position than before. Prime Minister Imran Khan was ousted in April after a fallout with Pakistan's army over a range of issues, including his management of energy supplies and the larger economy.

https://www.ndtv.com/world-news/pakistans-12-hour-blackouts-linked-to-a-massive-shift-in-europe-3064863


The new prime minister, Shehbaz Sharif, has ordered the state-owned importer to procure the fuel at any cost to halt the crippling blackouts. It's also trying to negotiate new long-term LNG purchase agreements, though the terms will certainly be worse than they were six years ago. The government "will go for the most favorable deal," the Ministry of Energy said in a statement to Bloomberg News.

The expense is creating its own knock-on effects. The country is now "at high risk of default," the Institute for Energy Economics and Financial Analysis said in a note published last month. Moody's Investors Service downgraded its outlook on Pakistan to negative from stable, citing financial concerns that includes a delay in an IMF bailout.

Pakistan's reliance on LNG and its suppliers' willingness to default has worsened the energy crisis in the country. And Pakistan isn't alone. Emerging nations around the world are struggling to meet the needs of their citizens within the constraints of their budgets.

It's also driven them to buy energy from Russia, dampening the effects of Europe's efforts to cut them off.

In the face of financial crisis and massive oil shortages, Sri Lanka has turned to Russia to procure fuel. Pakistan is also exploring long-term contracts with Russian LNG suppliers. India has already boosted purchases from Russia, a trend that may accelerate. In response to the blistering summer heat, the government has ordered power plants to buy fuel from overseas.

Pakistan's woes also bode poorly for other cash-strapped importers, including Bangladesh and Myanmar. The state-owned utility in Bangladesh recently procured the nation's most expensive LNG shipments from the spot market to keep the grids running and industries stocked, while Myanmar has halted imports for the last year due to the run-up in prices.

Europe's massive shift may prompt other countries, like India and Ghana, to rethink long-held plans to increase dependence on the super-chilled fuel. Governments would instead double down on dirtier-burning coal or oil, frustrating efforts to reach ambitious pollution-reduction targets this decade.

In a recent note, Fereidun Fesharaki, chairman of industry consultant FGE, sharply criticized European energy policies for creating "higher prices, economic scarcity and economic misery" around the world. "It is ok for Europe to decide what they want within their borders," he wrote. "But it is unfair and unreasonable to export the mess abroad, especially to the developing world."

Riaz Haq said...

India asked Washington not to bring up China’s border transgressions: Former US ambassador
Kenneth Juster made the statement on a Times Now show when asked why the United States had not made any statement about Beijing’s aggression.

https://scroll.in/latest/1018580/india-asked-washington-not-to-mention-chinas-border-transgressions-former-us-ambassador-to-india


India and China have been locked in a border standoff since troops of both countries clashed in eastern Ladakh along the Line of Actual Control in June 2020. Twenty Indian soldiers were killed in the hand-to-hand combat. While China had acknowledged casualties early, it did not disclose details till February 2021, when it said four of its soldiers had died.

After several rounds of talks, India and China had last year disengaged from Pangong Tso Lake in February and from Gogra, eastern Ladakh, in August.

Juster, who was the envoy to India between 2017 and 2021, had said in January 2021 that Washington closely coordinated with Delhi amid its standoff with Beijing, but left it to India to provide details of the cooperation.
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Former United States Ambassador to India Kenneth Juster has said that Delhi did not want Washington to mention China’s border aggression in its statements.

“The restraint in mentioning China in any US-India communication or any Quad communication comes from India which is very concerned about not poking China in the eye,” Juster said on a Times Now show.

The statement came in response to news anchor and Times Now Editor-in-Chief Rahul Shivshankar’s queries on whether the US had made any statements about Beijing’s aggression.

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During the TV show, defence analyst Derek Grossman claimed that Moscow was not a “friend” of India, saying that Russian President Vladimir Putin met his Chinese counterpart Xi Jinping at the Beijing Olympics. Grossman told the news anchor that Putin and Xi had then said that their friendship had “no limits”.

He claimed that India’s strategy to leverage Russia against China did not have any effects. “In fact, Russia-China relations have gotten only stronger.”

To this, Shivshankar said that before passing any judgement on India and Russia’s relationship, he must ask if US President Joe Biden had condemned China’s aggression at the borders along the Line of Actual Control or mentioned Beijing in a joint statement with Prime Minister Narendra Modi.

Grossman said: “To my understanding, the US has asked India if it wanted us to do something on the LAC but India said no – that it was something that India can handle on its own.”

Juster then backed Grossman’s contention.

Riaz Haq said...

In #Russia’s War On #Ukraine, #China and #India Emerge as Financiers. Their purchases of Russian crude are undermining the #West’s efforts to isolate the #Kremlin and upending the global #oil markets. #energy #gas #LNG #Modi #BJP https://www.nytimes.com/2022/06/24/business/russia-oil-china-india-ukraine-war.html?smid=tw-share


“They’ve squeezed every other source of oil we have and then say, OK, guys, you must not go into the market and get the best deal for your people,” Mr. Jaishankar said. “I don’t think that’s a very fair approach.”


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As Russia tries to break the stranglehold of sanctions, China and India are emerging as Moscow’s pivotal financiers by purchasing large amounts of Russian crude, putting themselves in the middle of the messy war with Ukraine and a geopolitical standoff with the West.

It’s a complex calculation for China, India — and the global economy.

Buying cheap oil from Russia offers economic and political advantages. China can diversify its oil supplies for national security reasons, while India can make billions exporting refined products like gasoline and diesel.

But undercutting European and American efforts to isolate the Kremlin risks serious diplomatic fallout that neither country wants. China has avoided overtly supporting Russia’s war in public statements, and India has portrayed itself as neutral.

The two countries, with the demand from their enormous domestic markets and the supplies from their vast refineries, are also central in determining the direction of oil prices. Their purchases of Russian crude in recent months have helped ease the pressure.

Their ultimate appetite for Russian oil will either shake or support the global economy, another complicating factor in the West’s capacity to stay united through a war of attrition in Ukraine. So far, the West has remained steadfast in its commitment to Ukraine, but a long period of high fuel prices and potential shortages in Europe could become politically unpalatable.


“One of the consequences of this conflict is a fundamental realignment of the global energy system, trading relationships and geopolitical alignments, with China and India more closely aligned with Russia,” said Jason Bordoff, who is director of Columbia University’s Center on Global Energy Policy and was an adviser to President Barack Obama.

Russia’s biggest export, oil is the currency of war, funding the bullets and rockets deployed on the battlefield in Ukraine. The West is trying to cut off the financial spigot, in part by weaning Europe, Russia’s biggest market, off its energy dependence through sanctions.

Four months into the war, Russian crude oil exports are down only slightly, as sales to China and India have largely filled the gap left by Europe. India and China bought roughly 2.4 million barrels of Russian crude a day in May, half of Russia’s exports. At least some is being refined into diesel and other fuels, and exported around the world, including to countries that oppose the invasion.

China and India have been buying at a 30 percent discount to the global benchmark price, a boon to both economies in a world buffeted by rising inflation. Despite the discounts, Russia’s oil revenues are growing, since prices have climbed to more than $100 a barrel.

The shift is just beginning, and the amounts of oil involved are still relatively small. The real test of China’s and India’s willingness to buy Russian oil will come when sanctions take full effect.

Riaz Haq said...

#Russia seeking #oil payments from #India in #UAE dirhams as #Moscow moves away from the #US #dollar to insulate itself from the effects of Western #sanctions. #Ukraine #energy #EU
https://www.reuters.com/business/energy/exclusive-russia-seeking-oil-payments-india-dirhams-sources-document-2022-07-18/

Russia is seeking payment in United Arab Emirates dirhams for oil exports to some Indian customers, three sources said and a document showed, as Moscow moves away from the U.S. dollar to insulate itself from the effects of Western sanctions.

Russia has been hit by a slew of sanctions from the United States and its allies over its invasion of Ukraine in late February, which it terms a "special military operation".

An invoice seen by Reuters shows the bill for supplying oil to one refiner is calculated in dollars while payment is requested in dirhams.

Russian oil major Rosneft is pushing crude through trading firms including Everest Energy and Coral Energy into India, now its second biggest oil buyer after China.

Western sanctions have prompted many oil importers to shun Moscow, pushing spot prices for Russian crude to record discounts against other grades.

That provided Indian refiners, which rarely bought Russian oil due to high freight costs, an opportunity to snap up exports at hefty discounts to Brent and Middle East staples.

Moscow replaced Saudi Arabia as the second biggest oil supplier to India after Iraq for the second month in a row in June.

At least two Indian refiners have already settled some payments in dirhams, the sources said, adding more would make such payments in coming days.

The invoice showed payments to be made to Gazprombank via Mashreq Bank, its correspondent bank in Dubai.

The United Arab Emirates, seeking to maintain what it says is a neutral position, has not imposed sanctions on Moscow, and the payments could add to the frustration of some in the West, who privately say the UAE's position is untenable and siding with Russia..

The trading firms used by Rosneft have started asking for the dollar equivalent payment in dirhams from this month, the sources said.

Rosneft, Coral Energy and Everest Energy did not respond to Reuters emails seeking comment.

Russia wants to increase its use of non-Western currencies for trade with countries such as India, its foreign minister Sergi Lavrov said in April.

The country's finance minister last month also said Moscow may start buying currencies of "friendly" countries, using such holdings to influence the exchange rate of the dollar and euro as a means of countering sharp gains in the rouble.

The Moscow currency exchange is preparing to launch trading in the Uzbek sum and the dirham.

Dubai, the Gulf's financial and business centre, has emerged as a refuge for Russian wealth.

India, also maintaining a neutral position, recongnises insurance cover by Russian companies and has offered classification to ships managed by a Dubai-based subsidiary of Moscow's top shipping group to enable trade.

India's central bank last week introduced a new mechanism for international trade settlements in rupees, which many experts see as a way to promote trade with countries that are under Western sanctions, such as Russia and Iran.

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.”

https://twitter.com/clary_co/status/1550995317864144896?s=20&t=Shlu_Mw4he67BUhCi4MaoA

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.

https://indianexpress.com/article/india/fertiliser-imports-from-russia-up-8048004/

Riaz Haq said...

#India turns to #Russian #fertilizer, showing challenge of isolating #Moscow over #Ukraine. Imports from Russia are up sharply and come on top of record shipments to India of discounted Russian #oil. #Ukraine️war #US #Modi #energy #inflation #economy https://www.washingtonpost.com/world/2022/08/04/india-russia-fertilizer-oil-imports/?tid=ss_tw

India has dramatically increased its imports of fertilizer from Russia in recent months, demonstrating the difficulties the United States and its allies face in isolating Moscow over the invasion of Ukraine.

From April to June, India imported 7.74 million tons of Russian fertilizer, a figure representing about two-thirds of all its fertilizer imports from Russia last year, making the country India’s top supplier, according to information provided in Parliament by the minister of chemicals and fertilizers, Mansukh Mandaviya.

These shipments, including urea and nitrogen-based fertilizers, come on top of record imports of discounted Russian oil. Although Persian Gulf countries remain India’s top suppliers of crude oil, India in July bought about 1 million barrels a day from Russia, a sharp increase since the beginning of the year, according to Bloomberg News. Government data shows that India spent $3.7 billion on Russian oil between January and May, up more than 350 percent from the same period last year.

As the war in Ukraine continues, so does the challenge Western countries face in seeking to stop Russian President Vladimir Putin’s military campaign without hurting the poorest in the world. U.N. Secretary General António Guterres recently warned that vulnerable countries would be on the verge of famine without Russian food and fertilizers.

“There is no option,” agriculture expert Devinder Sharma said of India’s increased fertilizer imports from Russia. “Agricultural production will come under stress without adequate fertilizer supplies.”

Unlike oil, fertilizer is not included in the U.S. sanctions placed on Russia because of the invasion.

For India, this year’s monsoon-season rice crop is crucial after a scorching heat wave in March damaged the country’s staple wheat crop and reduced yields. With food stocks depleted and the climate uncertain, India banned wheat exports this year, saying its food security was “at risk.”

The country has shied away from joining the Western coalition arrayed against Russia, initially because of its dependence on Moscow for weaponry and now because of concerns over energy and food security.

India’s imports of Russian coal and sunflower oil also have jumped. Overall, Russia has become the 10th-largest source of imports to India, according to data from the Indian Ministry of Commerce and Industry, ranking much higher than in previous years. Through May, India imported goods worth $8.3 billion from Russia, nearly triple the value for the same period last year.

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 https://www.reuters.com/business/energy/us-says-india-hid-russian-origin-fuel-shipped-us-india-cbank-2022-08-13/

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...

#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 https://www.axios.com/2022/09/01/india-russian-oil-military-exercises

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

https://www.energyintel.com/00000183-21d9-d467-adc7-21fdd54f0000

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...

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.”

While Washington may not have heard the subtle implications of Jainshankar’s words, Beijing appears to have done so. Almost immediately after the text of the Indian minister’s comments was made public, the spokesperson for China’s foreign minister declared that both India and China “have the wisdom and capability to help each other succeed rather than undercutting each other.” The takeaway from this exchange is that while both China and India view their ongoing territorial disputes as problematic, they are able and willing to keep their eye on the bigger picture — the ascendancy of the so-called “Asian Century”.

The fact is that India and China have been working toward this goal for some time now. Both are critical participants in the Shanghai Cooperation Organization, which envisions the growth and empowerment of a trans-Eurasian economic zone that can compete with the economies of the US and Europe on a global scale. Likewise, India and China are actively cooperating within the framework of the Brics economic forum, which is emerging as a direct competitor to the Western-dominated G7.

While it is possible for India to navigate a policy path balancing the US and China in the short term, eventually it will need to go all in on China if its aspirations for an “Asian Century” are ever to be met. This narrative is overlooked by those in the US pursuing zero-sum policies with India when it comes to China.

Given the destiny inherent in the collective embrace of an “Asian Century” by India and China, the US could well find itself on the outside looking in when it comes to those wielding influence in the Pacific going forward. One thing is for certain — the “American Pacific Century” which encompasses the period between the Spanish-American War and the post-Cold War era, where US military, political, and economic power reigned supreme, has run its course. Whether or not India and China will be able to supplant it with an “Asian Century” is yet to be seen. But one thing is for certain — the strategic intent is certainly there.

Scott Ritter is a former US Marine Corps intelligence officer whose service over a 20-plus-year career included tours of duty in the former Soviet Union implementing arms control agreements, serving on the staff of US Gen. Norman Schwarzkopf during the Gulf War and later as a chief weapons inspector with the UN in Iraq from 1991-98. The views expressed in this article are those of the author.

Riaz Haq said...

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

https://www.bloomberg.com/news/articles/2022-09-15/modi-s-outreach-to-putin-risks-putting-india-in-us-crosshairs


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

https://www.bloomberg.com/news/articles/2022-09-15/modi-s-outreach-to-putin-risks-putting-india-in-us-crosshairs


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.

https://www.axios.com/2022/09/15/xi-putin-meeting-samarkand


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.

https://news.yahoo.com/putin-tells-modi-understands-indias-142301013.html

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


https://worldoil.com/news/2022/9/20/u-s-senators-seek-secondary-sanctions-on-russian-oil-purchases/

(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.
https://economictimes.indiatimes.com/industry/energy/oil-gas/russia-becomes-indias-2nd-largest-crude-supplier/articleshow/94628529.cms


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

https://www.business-standard.com/article/international/russia-bounces-back-to-become-india-s-second-largest-crude-supplier-in-sep-122100100217_1.html

https://twitter.com/suhasinih/status/1577124600399659008?s=20&t=d6vjRJYgQz8UUgURupmObg

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.

https://www.reuters.com/business/energy/indias-russian-oil-binge-sends-middle-east-imports-19-mth-low-trade-2022-10-27/

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.com https://oilprice.com/Latest-Energy-News/World-News/Russia-Becomes-Indias-Top-Crude-Oil-Supplier.html #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.

https://www.intellinews.com/russia-s-international-reserves-up-3-6bn-in-one-week-to-571bn-253235/

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...

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:
https://economictimes.indiatimes.com/news/economy/foreign-trade/indias-export-destinations-netherlands-and-brazil-leapfrog-ahead/articleshow/96333138.cms

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"
https://www.dawn.com/news/1733661

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

https://www.livemint.com/news/world/ukraine-wants-us-to-impose-sanctions-against-india-here-s-why-11675500992333.html

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...

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


https://www.reuters.com/markets/currencies/indias-oil-deals-with-russia-dent-decades-old-dollar-dominance-2023-03-08/

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?


https://globelynews.com/europe/ukraine-foreign-minister-visit-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.

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https://en.wikipedia.org/wiki/Pakistan–Ukraine_relations

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]