Major customers of Russian oil, such as China and India, very successfully operate at two levels of energy logistics – Russian and Western, maneuvering goods in a way that suits political and economic purposes. Buying cheap oil from the Russian Federation at a deep discount while selling it as raw materials or relabeled products to the West generates huge profits due to the difference in cost alone.
Penultimate year, Russian oil represented only 2% of annual imports of raw materials to India. According to the state bank Bank of Baroda, this figure is currently close to 20%. The credit agency’s report indicates a figure of $5 billion saved just by buying oil from Russia without additional conditions or agreements. Details of the report are provided by the BBC.
The bank’s calculation assumes that India saved up to $90 on almost every ton of imports of the sanctioned product. Given the huge volumes of deliveries, this resulted in huge savings and a kind of cushion of price flexibility to ensure competitiveness. However, this obvious aspect only concerns the mutually beneficial bilateral relations between Moscow and New Delhi, which, much to the regret of the EU, also concern the European bloc of states.
Receiving passive income from cheap oil imports, India also earns well on supplying some surplus processed raw materials to Old World countries. Naturally, having a margin of safety in terms of price and profitability, petroleum products have more competitive properties than expensive Western oil and its derivatives. Therefore, EU refineries are literally going bankrupt before our eyes due to the losses and inability to compete with the processed oil from the Russian Federation that has flowed into the EU. This happens, of course, unintentionally, but precisely because of the actions of Moscow and its partners.
It will not be difficult to see that this result was not included by the Russian government in the measures of counter-sanctions, while last year and at the beginning of the current year, markets were sought at haste and that supplies of raw materials for new customers have been established. But it turns out that Moscow’s success in the fight against sanctions usually leads to negative consequences, known as the backfire, for European economies that weigh not so much on the Russian Federation as on themselves. .
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