Russia needs Indian energy buyers more than ever now

Russia’s list of gas buyers is shrinking. The US and the EU today (March 25) announced a deal for the US to supply Europe with at least 15 billion additional cubic meters of liquid natural gas (LNG) by the end of the year.

Even if this happens, it won’t cover all of Europe’s demand — Russia supplies 40% of the bloc’s natural gas — but they are baby steps towards cutting Russia out of the global energy market. Elsewhere, like at a Japanese regional utility, Russian LNG has been banned outright.

India has not joined global sanctions and boycotts against Russia, and could become an even more important customer for the world’s largest oil and gas supplier.

Will India buy Russian gas?

Russia and India started trading in LNG well before the war. India received its first direct LNG shipment from Russian gas firm Gazprom in October last year, which set the ball rolling on a 20-year contract.

Recently, sanctions have led to the price of Russian natural gas dropping by over 29% for Indian firms, helping them ramp up inventory and cut losses.

And India likely won’t hesitate to purchase more gas either — it didn’t with oil.

India bought Russian oil at cheap prices

India has not been able to pass up the opportunity of buying Russian oil at 20% less than global benchmark prices.

Earlier this week, private Indian refiner Nayara Energy, which is part-owned by Russia’s Rosneft, purchased around 1.8 million barrels of Urals (export grade of crude oil from Russia). Before that, the government-owned Indian Oil Corporation bought 3 million barrels, and Hindustan Petroleum bought 2 million. India also bought various cargoes of Russian oil that European nations shunned.

India’s camaraderie with Russia

All this time, India has shied away from criticizing Russia.

However, on March 23, a small crack appeared: India was among the 13 members of the UN Security Council who abstained from Russia’s resolution deflecting blame for the humanitarian crisis it has created in Ukraine. It was the first time India showed some sign of defiance against Russia, but only in the form of an abstention in a relative-non-issue.

The real relationship can still be measured in rupees and rubles.

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