Last week, Russian President Vladimir Putin called on BRICS leaders to cooperate in the face of selfish acts from the West. BRIC countries is an investing concept for the four large emerging markets and developing countries of Brazil, Russia, India and China.

“Only on the basis of honest and mutually beneficial cooperation can we look for ways out of the crisis situation that has developed in the global economy due to the ill-considered and selfish actions of individual states,” Putin said.

Since Russia’s invasion in late February, global oil prices have soared, giving refiners in India and other nations an additional incentive to use the oil Moscow is offering them at steep discounts of $30 to $35 a barrel, compared with Brent crude and other international oil now trading at about $120 per barrel.

Most of the ships that transport Russian crude are European in origin, which means placing tighter controls on shipowners would seriously limit the scope for this kind of contravention.

Despite intense pressure from the United States to limit their purchases, India and other Asian countries are increasingly important sources of oil revenue for Moscow as the European Union and other allies shut off energy imports from Russia in accordance with sanctions over Putin’s war in Ukraine.

At a time when Washington and allies are attempting to restrict financial flows supporting Moscow’s war effort, such sales are increasing Russian export revenues. Europe may wind up importing gasoline, diesel and other products from India, or other countries that have been diluted with Russian Urals.

“We are convinced that now, more than ever, the leadership of BRICS countries is needed to develop a unifying, positive course towards the formation of a truly multipolar system of intergovernment relations,” Putin added.

The Indian market

India is currently the third-largest energy consumer in the world, according to BP. By 2045, the India Brand Equity Foundation (IBEF), which submits assessments to the Indian government, predicts that India’s daily oil consumption would treble to almost 11 million barrels.

India has received 34 million barrels of discounted Russian oil since Moscow invaded Ukraine in February. According to the Indian Ministry of Commerce, these totalled $15.99 billion (€15.12 billion) between April and May alone. The sum for the same time frame in 2021 was $8.94 billion.

India is providing an outlet for Russian crude oil to get through the market. From 100,000 barrels per day in February to 370,000 barrels per day in April to 870,000 barrels per day in May, India has increased its imports of Russian crude exponentially.

The majority of those exports, which mostly went to the refineries in Sika and Jamnagar on India’s western coast, replaced oil from Saudi Arabia and Iraq. Up until April, Russian oil accounted for less than 5 per cent of the crude processed at the Jamnagar oil refinery. In May, it accounted for more than a quarter, according to the Centre for Research on Energy and Clean Air, with some 30 Russian tankers loaded with crude making their way to Indian shores, unloading about 430,000 barrels per day.

The Chinese market

Separately, China is set to receive about 880,000 bpd of Russian oil via the two East Siberia-Pacific Ocean Pipelines (ESPO) and the Kazakhstan-China pipeline through government agreements, with all three projects pumping at maximum rates.

As refiners profited from discounted supplies in the face of sanctions on Moscow over its invasion of Ukraine, China’s crude oil imports from Russia increased by 55 per cent from a year earlier to a record level in May this year, unseating Saudi Arabia as China’s leading oil supplier.

While China’s overall crude oil demand has been dampened by COVID-19 curbs and a slowing economy, leading importers, including refining giant Sinopec and trader Zhenhua Oil, have stepped up buying cheaper Russian oil on top of sanctioned supplies from Iran and Venezuela allows them to scale back competing supplies from West Africa and Brazil.

China has continued to import Iranian oil despite US sanctions against the country, typically posing as a supplier from another nation. The volume of imports is roughly equal to 7 per cent of China’s overall crude oil imports.

According to figures from customs, imports of Russian liquefied natural gas (LNG) for the first five months increased by 22 per cent year over year to 1.84 million tonnes, with the majority coming from the Sakhalin-2 plant in the Far East and Yamal LNG in the Russian Arctic.