Donald Trump
US President Donald Trump has warned to install penalty on countries buying oil from Russia. This warning may affect India and China, because both these countries import the most oil from Russia. After the introduction of Russia-Ukraine War, India increased oil import from Russia, while China’s import was stable. Right now, this news does not show much effect in the market, but if the oil supply from Russia is closed, India and China will have to take oil from other sources, which can be expensive.
India imports more than 85% of its oil needs. Earlier Middle East was the main oil supplier of India, but Russia has taken this place in the last three years. After the Russia-Ukraine War, Western Countries put up sensations on Russia, due to which Russia started selling its oil at chip rates. India benefited from this and now Russia is the largest oil supplier in India, which supplies about 40% oil imports of India.
India imports from Russia
In June, India imported 21 lakh barrels of oil from Russia every day, which is the highest in the last one year. On the other hand, China buys more than 10 lakh barrels from Russia every day, which is 47% of its purchase. If Trump’s threat applies and oil imports from Russia are closed, India will have to take oil from areas like Middle East and Africa. But this oil will be more expensive than Russia. In May, the imported oil from Saudi Arabia was $ 5 per barrel from Russia’s oil and 50 cents per barrel more than Iraq. This can increase India’s oil cost.
Experts say that India has an option to buy oil from other OPEC countries, but it can be expensive. Right now there is no major disturbance in the market, but India and China may have to make new strategy for oil supply in the future.