The European Union should crack down on India reselling Russian oil to Europe in the form of refined fuel, including diesel, EU foreign policy chief Josep Borrell said in an interview with the Financial Times published Tuesday.
India became one of the main buyers of Russian oil last year, following Moscow’s invasion of Ukraine on 24 February 2022. Access to cheap Russian oil has boosted Indian refineries’ production and profits, allowing them to export refined products competitively to Europe and take a larger market share.
Meeting with the Indian Minister of Foreign Affairs
Borrell told the newspaper that he would raise the issue with Indian Foreign Minister Subrahmanyam Jaishankar at a meeting in Brussels on Tuesday. “If diesel or gasoline enters Europe … from India and produced from Russian oil, it is certainly a circumvention of sanctions and member states must take action,” said the head of European diplomacy. “When India buys Russian oil, that’s normal… But if they use it to become a center where Russian oil is refined and the byproducts are sold to us… we have to act,” Borrell said.
In his remarks after the meeting, Borrell said he had discussed Russia’s invasion of Ukraine, including the issue of food security, in his talks with Jaishankar, but his remarks did not refer to Russian oil. Jaishankar said at a press conference that according to his understanding of the EU sanctions rules, Russian oil substantially processed in a third country was no longer considered a Russian product.
European Commission Vice President Margrethe Vestager said the EU would discuss the issue with India “but it will be with an outstretched hand and of course not with an accusing finger. Indian refiners, who rarely bought Russian oil before because of high transportation costs, imported between 970,000 and 981,000 barrels per day in fiscal year 2022/23 (April-March), accounting for more than a fifth of the country’s total fuel imports.
Agreement between Russian oil producer and Indian refiner
Russia’s largest oil producer, Rosneft, and India’s largest refiner, Indian Oil Corp, have also signed a long-term agreement to substantially increase and diversify the grades of oil delivered to India. According to Kpler’s vessel tracking data, Reliance Industries and Nayara Energy were the top exporters of refined fuels and buyers of Russian oil. The companies did not immediately respond to requests for comment.
Before the Russian invasion of Ukraine, India exported an average of 154,000 barrels per day of diesel and jet fuel to Europe. However, this figure rose to 200,000 barrels per day after the EU banned imports of Russian oil products from February 5 this year, according to Kpler data. Borrell told the Financial Times that any mechanism to curb the flow of Russian oil would have to be implemented by national authorities, suggesting that the EU could target buyers of Indian refined fuels that it believes are derived from Russian crude. “If they’re selling, it’s because someone is buying. And we need to look at who is buying,” he said.