New Delhi: India is leading the group of ‘laundromat countries’ that buy discounted crude oil from Russia, refine it, and sell the processed products to European countries, thus sidestepping European sanctions against Russia, a Finland-based group said in its report.
The report, titled Laundromat: How the price cap coalition whitewashes Russian oil in third countries by Finland-based Centre for Research on Energy and Clean Air (CREA), was released on April 19.
The ‘laundromat countries’ are China, India, Turkey, the UAE, and Singapore.
The European Union has imposed massive sanctions against Russia in response to its invasion of Ukraine, which started on February 24, 2022.
As part of the sanctions, the EU cannot import crude oil and refined petroleum products directly from Russia.
India’s latest hack to purchase cheap crude from Russia – thanks to the sanctions that put a price cap of $60 per barrel on Russian oil – and refine and sell it to Europe has made it a significant player in the global oil markets.
According to Reuters, Europe typically imported an average of 1,54,000 barrels per day (bpd) of diesel and jet fuel from India before Russia’s invasion of Ukraine. But that increased to 2,00,000 bpd after the EU banned Russian oil products imports from February 5, the report said, citing Kpler data.
In addition, India’s oil imports from Russia are now higher than the combined imports from Iraq and Saudi Arabia. Russia is now supplying more than one-third of all oil India imported, PTI reported, citing energy tracker Vortex.
The CREA report said that this is a way to circumvent measures that attempt to hinder Russian government revenues used by president Vladimir Putin to fund the war.
India shipped the highest volume of oil products to price cap coalition countries, a year since Russia’s invasion of Ukraine.
It sold 14.8 million tonnes of oil products to these countries, representing a 2.4% increase from the prior year in volume terms, but a 48% rise in value terms. The latter is due to the rise in oil product prices which provides higher profits for refineries exporting refined products, the report said.
UAE, China and Singapore sold 14.2 million tonnes, 7.5 million tonnes and 7.1 million tonnes, respectively, to the price cap coalition
countries, during the same period, it added.