As mounting pressure lowers the demand for Russian oil, the sanctions-hit nation is offering steep discounts on oil to India. Russia is offering oil to India for $35 a barrel—pre-war prices—to lure India to lift more shipments. The price could surge to $45 barrels and Russia wants India to buy 15 million barrels in the first deal, a Bloomberg report reads.
Russia has also offered rupee-ruble-denominated payments using its SPFS financial messaging system - since Moscow has been banned from SWIFT - that could make trading more attractive for India, sources told Bloomberg. Since Russia invaded Ukraine in February, India has bought 13 million barrels of oil from the country. India’s move to buy discounted oil from Russia has been strongly criticized by the UK and the US. S Jaishankar at his meeting with UK’s foreign minister Liz Truss strongly defended India’s decision to buy Russian oil.
"When prices go up, I think it is natural for countries to look for good deals for their people," Jaishankar said. He also pointed out that European countries have bought almost 15 per cent more oil from Russia in March than in February.
India is the third-largest consumer of oil after the US and China, 80 per cent of which is imported. The purchase is expected to involve Russia's Rosneft PJSC and the Asian nation's biggest processor Indian Oil Corp., with a built-in clause in the contract which says that Indian Oil will buy only when it's economical.
The routing of the oil is likely to be done through Russia's Vladivostok Port in the far east to avoid shipping hurdles from the Baltic Sea in the west of the country.
