Breakingviews – EU will go easy on Indian resale of Russian fuel – Reuters

Breakingviews – EU will go easy on Indian resale of Russian fuel – Reuters

MUMBAI, May 23 (Reuters Breakingviews) - Western pledges to prevent the circumvention of anti-Russian sanctions risk falling flat in India. Fuelled by cheap imports from Moscow, the Asian country’s yearly oil products sales to Europe have surged over 70% to $15 billion in the past year, according to data from the Indian Ministry of Commerce. The trend shows trade restrictions are not watertight. And the Group of Seven vowed on Friday to plug sanctions loopholes. Yet, the risk of an energy inflation resurgence makes a European Union ban on Russian oil reselling a tough call.

The war in Ukraine has offered India an opportunity to boost purchases of discounted Russian oil. Crude imports from the sanctions-hit country jumped to $31 billion during the twelve months to March from just $2.5 billion in the previous year, Indian government data show. Russia is now the largest exporter of the commodity to the Asian nation, ahead of Iraq and Saudi Arabia. Procured at a few dollars below a G7 price cap of $60 a barrel imposed in December, part of Russia’s Urals crude consignments has been used for Indian domestic consumption and helped cool inflation.