National interest first, buying discounted Russian crude: FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Friday confirmed that India has procured discounted crude oil from Russia, worth 3-4 days of the country’s oil requirements, despite criticism from the US that trade with Moscow would help fuel the Ukraine invasion.

“We have started buying (oil from Russia). We have received quite a number of barrels. I would think about 3-4 days of supply, and this will continue. India’s overall interest is what is kept in mind,” Sitharaman said on Friday, adding both she and Foreign Minister S Jaishankar had explained India’s position clearly at multiple fora.”I would put my country’s national interest first, and I would put my energy security first. If there is fuel available and available at a discount, why shouldn’t I buy it? I need it for my people, so we have already started purchasing,” she said at India Business Leader Awards, organised by CNBC-TV18.

US Commerce Secretary Gina Raimondo has said reports that India setting up a payment system to procure Russian crude oil were “deeply disappointing”. The White House has, however, previously clarified that a move by India to procure discounted crude oil from Russia would not be a violation of US sanctions on Moscow.

India has been offered discounts as high as $35 per barrel on crude oil prices before the start of the conflict by Russia, according to officials. Sitharaman’s comments come amid a two-day visit by Russian Foreign Minister Sergey Lavrov.

Four days of India’s crude oil imports would equate to about 2.1 million metric tonnes or about 16.1 million barrels of crude oil based on India’s crude oil imports in FY2021. India imports about 85 per cent of its crude oil requirements but only about 3 per cent of crude oil imports are ordinarily sourced from Russia.

The US and Canada have banned all imports of Russian crude oil and the UK has announced that it will phase out crude oil purchases from Russia by the end of the year. Russian cargoes of crude oil have been struggling to find buyers as many major firms are avoiding purchasing Russian crude over concerns of reputational damage.

The price of Brent crude has risen sharply this year, even hitting a 14-year peak of $139 per barrel in early March over concerns of an import ban on Russian crude oil by EU countries.

The price of Brent crude on Friday was about $105.3 per barrel, up about 35 per cent from $77.8 per barrel at the beginning of the year, and about $10 per barrel higher than the price of Brent crude prior to Russia’s invasion of Ukraine.

Indian refiners had temporarily halted new purchases of Russian flagship Urals crude after Russia announced a “special military operation in Ukraine” but resumed purchases in March.

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