In July, Russia overtook Saudi Arabia as India’s second largest oil supplier thanks to imports of Russian crude oil. However, the latter quickly regained its former position, and as a result, Russia is now our third largest oil supplier, according to trade data cited by Reuters.
India began looking for deals on Russian oil when the situation in Ukraine forced Moscow’s regular customers to shun those barrels and brokers began offering steep discounts. India decided to import oil despite strong pressure from developed countries to stop doing business with Russia.
Even External Affairs Minister S. Jaishankar defended the move, calling it the “best deal” for the nation. He had already stated that India and others like Europe should be free to prevent the disastrous effects on their economies. India is now the second largest consumer of Russian crude oil after China.
In April-July, India imported mineral oil from Russia worth 11.2 billion dollars. Compared to the same period last year, when it was $1. 3 billion, the number has increased significantly, an astonishing eight times. India increased its imports from Russia in March, and since then total imports have crossed $12 billion from just over $1. 5 billion in 2017.
Despite the fact that refiners, not the government, buy oil, a decrease in the price of oil has a positive effect on the macroeconomic indicators of the economy. According to the Times of India, buying oil at lower prices will help control costs and the current account deficit by lowering import costs and reducing demand for the dollar.
It is important to note that India has saved money twice while seeking cheaper prices in the international oil market. Before the epidemic shut down the world in 2020, we were able to raise Rs 25,000 crore. Later, the Indian government had stockpiled strategic reserves and refineries had put oil on ships for storage.