New Delhi (CNN Business)India’s appetite for cheap Russian oil is swelling, even as the Westcontinues to hit Moscow with unprecedented sanctions.
Russian Crude flows to India are expected to reach 3.36 million metric tonnesin May, according to estimates from Refinitiv. This is nearly 9 times higher than the 2021 monthly average of 382,500 metric tonnes.
Part of the reason for the price disparity: The West has shunned Russian oil. On Monday, the EU agreed to ban 90% of Russian oil imports by the end of the year. Europe is the biggest buyer of Russian energy.
The embargo from a huge importer like Europe would pile pressure on the Russian economy, but Moscow has found other buyers in Asia.
According to Refinitiv, Russia crude flows to India soared to 1.01 million metric tonnes in April from 430,000 metric tonnes in March.
India’s Ministry of Petroleum and Natural Gas did not immediately respond to a query on the impact EU’s partial ban will have on the South Asian economy’s oil ties with Moscow.
Earlier in May, India played down the import spike. In a statement, the Ministry of Petroleum and Natural Gas said the country imports oil from all over the world, including a significant volume from the United States.
“Despite attempts to portray it otherwise, energy purchases from Russia remain minuscule in comparison to India’s total consumption,” the ministry said in a statement. “India’s legitimate energy transactions cannot be politicized,” it added.
EU moves ahead with partial ban
While Asia’s purchase of Russian crude is surging, the EU on Monday resolved to block most of it by the end of this year.
Russian crude accounted for 27% of the bloc’s imports in 2021, according to Eurostat.
Russian oil delivered by tankers would be banned, while an exemption will be made for the southern segment of the Druzhba pipeline, said Ursula von der Leyen, president of the European Commission, in a press conference.
The northern segment of the pipeline serves Poland and Germany — who have agreed to the embargo. The southern part goes to Hungary, Slovakia and Czech republic and accounts for 10% of imports of Russian oil.
A significant portion of Russia’s oil exports to Europe travel to the bloc via pipelines. Rerouting those barrels to markets in Asia would require costly new infrastructure that would take years to build.
— CNN’s Julia Horowitz and Vedika Sud contributed to this report