- Payment in rupees is the only option
- Russia offered oil to India at a huge discount
- The price was set at $60 per barrel
Russian oil is set to take a hit due to the war in Ukraine and sanctions imposed on India’s payments system. Sanctions imposed on Russia by America and European countries are becoming a weapon that threatens India more and more. The payment issue is becoming so big that Russia is no longer in a position to supply oil. According to a report, Russia no longer wants to supply oil to India in dollars. Already getting oil from Russia at a discount. According to sources, the price of 60 dollars per barrel has been fixed by the G7 countries. In such a situation, the challenge facing India is very big and all eyes are on the outcome of this situation in the coming days.
Payment in rupees is the only option
Sources say that India does not want to pay in Chinese currency Yuan or Euro. If banks pay in dollars, the price of crude oil set by the G7 countries will be violated. So, banks and traders don’t want to get involved. Payment in rupees is the only option. But Moscow is already grappling with a growing rupee imbalance due to India’s imports of defense equipment. This situation is becoming very difficult. Russia, facing Western sanctions after the war in Ukraine, has found a large market for its crude oil in India.
Russia offered oil to India at a huge discount
Russia offered oil to India at a huge discount. As a result, India’s crude oil imports from Russia have increased by nearly 13 times in the year 2022-23. Where it was $2.5 billion in the year 2021-22, it has increased to over $31 billion in 2022-2023. Russia has now overtaken traditional oil suppliers such as Saudi Arabia, UAE and Kuwait. Now it has become the largest supplier of oil in India. If sources are to be believed, the oil that India was getting was mostly lower than the prices set by the G7 countries. In addition, western restrictions will apply.
The government is considering the situation
India is able to pay for most of its oil in dollars. But oil prices below $60 a barrel have now largely disappeared. One reason is that Russia has reduced oil concessions due to rising demand from China. Another is that the lower grade of Eurail, which used to be available at cheaper prices, is now in short supply, forcing India to go higher. Officials from the Ministry of External Affairs, Ministry of Finance and Ministry of Petroleum and Natural Gas are discussing the situation and how best to handle it, sources said.
