The United States has warned India that buying more oil from Russia could expose it to a "great risk" in light of more sanctions against Moscow, Reuters has reported, citing an unnamed senior U.S. official.
"U.S. has no objection to India buying Russian oil provided it buys it at discount, without significantly increasing from previous years," the source said, adding. "Some increase is allowed."
According to Reuters, India has taken advantage of the steep discount for Russian oil following a wave of U.S. and European sanctions on its financial system that has discouraged many traditional buyers from considerably boosting purchases.
Since February 24, when Russia invaded Ukraine, India has bought some 13 million barrels of Russian crude, which compares with 16 million barrels for the whole of last year.
Earlier this month, the FT reported, citing data from Kpler, that Indian purchases of Russian oil had jumped to an average daily of 360,000 barrels, which was four times the average amount India bought from Russia last year.
"Already committed oil cargoes from Russia that can't find buyers in Europe are being bought by India," Alex Booth, head of research at Kpler, told the FT. "Exports to India surged in March before any official announcement by New Delhi."
India imports more than 80 percent of the crude oil it consumes and has been seeking to diversify its sources, including by boosting the intake of Russian oil. The Western sanctions have shut off Russia's trade in U.S. dollars, but, according to reports, New Delhi and Moscow are discussing a payment arrangement using their own currencies.
Earlier today, the Economic Times reported, citing unnamed sources, that Moscow and New Delhi had finalized an alternative payments platform aimed at facilitating bilateral trade amid the sanctions. According to the report, the new platform could become operational within a week.
By Irina Slav for Oilprice.com
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