Russian oil is reaching Europe, and India is now the biggest fuel supplier to the EU

India’s export of fuels such as diesel to the European Union increased by 58% in the first three quarters of 2024, with the majority of these exports presumably originating from the refining of discounted Russian oil, according to a monthly tracker report.

In an attempt to impede the Kremlin’s revenue and establish a funding gap for the invasion of Ukraine, the EU/G7 countries implemented a price limit and an embargo on the importation of Russian crude oil in December 2022.

However, the absence of a policy regarding refined oil produced from Russian petroleum allowed countries that did not impose sanctions to import substantial quantities of Russian crude, refine it into oil products, and legally export them to the price-cap coalition countries.

Indian crude oil purchases have increased from less than one percent of the total oil imported in the pre-Ukraine conflict period to nearly 40% of the total oil purchases since the invasion, making India the second largest buyer of Russian crude oil.

Due to the price limit and the European nations’ refusal to purchase from Moscow, Russian crude oil was available at a discount to other internationally traded oil, which was the primary reason for the increase. Fuel exports were, however, priced at their entire value.

By exploiting the refining loophole, India has emerged as the largest exporter of crude products to the European Union. The Centre for Research on Energy and Clean Air (CREA) reported that exports to the EU from the Jamnagar, Vadinar (in Gujarat), and new Mangalore refineries, which are becoming more dependent on Russian crude, expanded by 58% year over year in the first three quarters of 2024.

A unit at Vadinar is owned by Nayara Energy, which is funded by Russia’s Rosneft, while Reliance Industries Ltd operates oil refineries in Jamnagar. Mangalore Refinery and Petrochemicals Ltd (MRPL) is a subsidiary of the state-owned Oil and Natural Gas Corporation (ONGC).