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India is close to signing a deal with Russia to buy 3.5 million barrels of crude oil at a steep discount, reported the Times of India, citing people aware of this development.
As per the terms of the deal, Moscow will be responsible for the shipping and insurance of the crude oil delivered to New Delhi.
After China, India is the world’s second largest crude oil importer.
The large discount offered by Russia is expected to provide a relief to India, at a time when crude prices are touching multi-year highs.
According to media reports, Indian Oil Corp, which is a leading refiner in the country, bought 3 million barrels of Urals, a grade exported by Russia. This was the first purchase made by India since Moscow’s military incursion on Ukraine.
Russia has been imposed with sanctions by the US and its allies, which have led to several companies and countries rejecting its oil. The numerous sanctions have forced Moscow to search for buyers for its oil, and sell it at a discounted price.
When asked about a report on the possibility of India buying Russian oil, White House press secretary Jen Psaki replied: “I don’t believe this would be violating that [sanctions].”
“But also think about where you want to stand when history books are written at this moment in time. Support for the Russian leadership is support for an invasion that obviously is having a devastating impact,” Psaki added.
New Delhi has not supported the Russian invasion of Ukraine, but it has abstained in all UN resolutions against Moscow.
The amount of oil being discussed for purchase is not large, and will be delivered over a few months.
The sources did not disclose the crude type to be imported by India.
India imports to meet 85% of its oil requirement. Between April 2021 and January 2022, oil imported from Russia accounted for only 2% of the total import of 176 million tonnes of oil.
Meanwhile, Lithuania has threatened to stop importing Russian oil and gas. In 2019, Lithuania received approximately 63% of its oil imports from Moscow, reported the BBC.
Late month, Western countries hit Moscow with sanctions over its invasion of Ukraine.