Will there be a big break on India’s cheap Russian oil supply after June 17? Will the new pressure from Trump administration create tension in India-US relations? Can petrol and diesel prices increase in India if oil imports from Russia stop? Is there a bigger geopolitical game going on behind the global oil market?
US Russia Oil Sanctions: The biggest game that has been going on in global geopolitics since the beginning of the Ukraine war has now reached a very critical juncture. Dark clouds of uncertainty are beginning to loom over India’s energy sector and economy. The administration of US President Donald Trump has indicated that it will no longer extend the sanctions waivers given to many countries including India on the purchase of Russian crude oil. This statement of US Foreign Minister Marco Rubio has created a stir from New Delhi to Washington. Now the biggest question is that after June 17, will India face new obstacles in buying Russian oil?
Ticking clock and deadline of June 17
Speaking before the Senate Foreign Relations Committee, Secretary of State Marco Rubio made it clear that the US wants to phase out these exemptions as soon as possible. At present, this concession given to India is going to end on June 17. Responding to Senator Jean Shaheen’s question, Rubio said that this exemption was given only to keep oil prices stable in the global market, and not to continue it forever. America believes that Russia is funding its military campaign with the earnings from this oil. Now that America is thinking of using its strategic reserves, it has brought to its peak the pressure on allies like India to distance themselves from Russia.
Why did America become strict on purchasing oil from Russia?
Since the start of the Ukraine war, the US has consistently claimed that revenues from Russia’s oil exports fuel its military operations. For this reason, Western countries had imposed many sanctions on Moscow. However, some countries were given temporary relief to maintain global oil supply. Now Washington believes that this relief cannot be permanent.
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Why did India become a big customer of Russia?
After Western sanctions, Russia started selling its crude oil at a huge discount. India took advantage of this opportunity and started buying Russian oil on a large scale.
India got three big benefits from this:
- Cheap energy became available.
- There was less pressure on domestic fuel prices.
- Energy security strengthened.
Within a few years Russia became India’s major oil supplier and Indian refineries imported Russian crude at record levels.
Trump’s ‘secret deal’ or tariff pressure on India?
The situation is not limited to oil trading only. The US has also raised the issue in trade talks with India in recent months. According to reports, the US administration wants India to gradually reduce its dependence on Russian oil. Instead, emphasis is being laid on increasing alternative energy supply from America and its allied countries. Meanwhile, 25 percent additional tariff on Indian goods and trade pressure have made this dispute more sensitive.
Clear message from New Delhi
India has repeatedly reiterated that its energy policy is not dictated by pressure from any third country, but by national interest and energy security needs. New Delhi argues that affordable and stable energy supply is essential to run its economy of more than 140 crore people. Therefore, India has the right to buy oil from the source which is most profitable for it.
What happens if the discount ends?
Experts believe that if the US exemption ends:
- Costs of Indian refineries may increase.
- Purchasing oil from alternative sources can be costly.
- Volatility may increase in the global oil market.
- There may be indirect pressure on the prices of petrol and diesel.
Although India has many alternative sources like the Middle East, Africa and Latin America, it will not be easy to get such huge discounts like Russia anywhere else.
‘National Interest’ vs ‘Global Pressure’: What will New Delhi do now?
India’s stand in this geopolitical maze has always been clear. For New Delhi, this issue is not just about trade but about the energy security and sovereignty of the country. India has consistently stated in global forums that its energy purchases are driven by national interest and affordability. Experts also believe that India’s purchase of Russian oil did not cause oil shortage in the global market, thereby averting a major international energy crisis. But now there is pressure from Washington that India should end its dependence on Russia and turn to other options like Venezuela. The eyes of the whole world are on how India protects its strategic autonomy after June 17.