Concerns that India is Russia's oil "back door" to Europe

A giant blue and red hull from Primorsky Krai called at Vadinal in western Gujarat, India earlier this month. Built in 2009 and sailing under the Liberia flag, an 84,000-ton oil tanker arrived from the port of Ustilga, a village inRussianear the border with Estonia.

Until 2017, the Vadinar Refinery was managed by Essar, the Indian owner of the Stanlow Refinery in Ellesmere Port. Since then, a consortium that includes the licensed Russian state oil company Rosneft and Trafigura, a commodities trader with a 24.5% stake, owns Nayala Energy, which operates a refinery.

The arrival of tankers occurred when India increased Russia's oil imports. Asian countries' willingness to surge Russia's crude oil at discounts of up to 30% has undermined US, European and British efforts to deplete Vladimirputin's war resources by reducing imports. Russia raised $ 20 billion from oil exports in May and returned to pre-invasion levelsIndia is now being used as a potential backdoor to Europe for Russia's oil supply. There is growing concern that there is. Import. Before the invasion of

Ukraine, India's Russian oil imports were negligible due to the high freight rates. But recently, Russian oil imports into India have increased. According to Reuters, Vadinar owner Nayara bought Russian oil and about 1.8 million barrels from Trafigura in March, just before international export restrictions were introduced, after a one-year gap. did.

However, the amount that India buys and sells is ultimately part of refined Russian crude oil. Used in filling stations in Europe. It is not clear where the Russian crude oil brought to Vadinar in Primorsky Krai will be used. Vadinar owners refused to comment on whether they were transporting Russian oil toEurope

May, India in May from Russia per day Imported about 800,000 barrels of oil. Its imports could soon increase to another 1 million barrels per day, or 20% of India's total imports. India,Chinaand the United Arab Emirates have regained sluggish growth in May as Russia's oil imports into the EU fell by 18%.

Putin said at the Brics (Brazil, Russia, India, China, South Africa) Business Summit this week that "Russia's oil supply to China and India has increased significantly."

India's 1.4 billion population gives a reason to look for cheap supplies. But it's a dangerous political game. "India is walking a tightrope," said Alangelder, vice president of Wood Mackenzie's refining, chemicals and oil markets. "If you take too much, you wouldn't want the West to sanction the rest of your economy."

According to the Energy and Clean Air Research Center, Gujarat Reliance Industries' Jamnagar refinery in May received 27% oil from Russia, up from 5% in April. According to the center, about 20% of the cargo exported from Jamnagar departs for the Suez Canal and heads for Europe or the United States. Shipped to France, Italy and the United Kingdom. However, there is no evidence that these cargoes contained Russian oil.

The UK has promised to phase out Russian oil by the end of the year. Britain did not import gasoline before the war, but diesel accounted for 18% of total demand. Russia's oil trade remains legal, but the stigma that accompanies it means that some international companies involved in fueling may try to hide its origins. Although some energy companies have rushed to cut shipments from Russia, industry watchers said some drivers in southeast England are still likely to be filled with Russian-refined diesel.

Bloomberg reported this month that oil state processors are trying to secure a six-month supply contact for Russian crude oil to India. India'soilCorp, Hindustan Petroleum, and Bharat Petroleum, three state-owned refiners, do not answer the question of whether they are importing Russian oil or exporting it to Europe. did.

Industry sources have proven that tracking Russian oil shipments via India to Europe is extremely difficult. "We see that some cargo of crude oil arrives at ports from different countries and is blended together. It is basically impossible to track hydrocarbons."

Russian There are several tactics used by shippers to hide the origin of oil, sources said. Financially, you can also pay in RMB instead of the industry standard dollar. RMB-denominated trading volumes have skyrocketed by 1,067% since the February invasion of Ukraine. The movement of oil cargo from one ship to another is also on the rise, suggesting that oil is being switched from the Russian flagship to another. As thousands of gallons of black move on the waves, more and more vessels are "darkening" by turning off the automatic identification system.

A third, more niche option for concealing Russian transactions is to use currency to cut and exchange oil directly for other products such as gold, food and weapons. Iran was previously paid by its trading partners in gold instead of dollars.

"If a country or oil company wants to hide its source of crude oil or petroleum products, it's very easy to do," said Ajay Parmar, an oil market analyst at ICIS. ..

" Indian refiners have apparently taken a large amount of discounted Russian crude oil and re-exported a significant portion of its refined products abroad. "There is," Shore said. "Given the apparently strong oil and diesel prices, this probably supports a strong refining margin for downstream Indian players," said capital analyst Craig Howie. Is understandable, of course, but seems to defeat the clear purpose of the West. Russia's economy and war machines. "

Oleg Ustenko, Chief Economic Advisor to President Wolodimir ZelenskyWas more frank and told the Guardian: But let's be clear. UK and EU energy, shipping and insurance companies helping Putin complete this pivot from pure desire to new markets are complicating his war crimes.

"European leaders not only ban their sanctions and Russia's fossil fuel imports, but also ban their trade from being overwhelmed, or else underway in Ukraine. The tragedy will continue and spread further. "

For Indian Prime Minister Narendra Modi, trade with Russia remains a politically balanced act. Oil prices remain high, putting pressure on consumers, while increasing the risk of a Western rebound.

Trafigura has "unconditionally condemned" the war and said it has "significantly reduced Russia's crude oil purchases." The company said it had suspended all transactions with Russian organizations before the final introduction of EU sanctions. Moon. Trafigura said it did not "manage" Nayala Energy or Vadinar. Trust declined to comment.