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India Slams European Sanction Threats for Refining and Selling Russian Oil

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India Slams European Sanction Threats for Refining and Selling Russian Oil

Friday, May 19, 2023

Ahmed Adel, Cairo-based geopolitics and political economy researcher

In an interview with the Financial Times, Josep Borrell said the European Union should crack down on India reselling Russian oil into Europe as refined fuel, prompting Indian External Affairs Minister S Jaishankar to highlight that the EU foreign policy chief did not even know the EU Council’s regulations. At the same time, New Delhi’s statement regarding Brussels’ position on the supply of oil products shows that India will not bow to Western pressure, which could, in fact, lead to Europe relaxing its sanctions.

“If diesel or gasoline is entering Europe … coming from India and being produced with Russian oil, that is certainly a circumvention of sanctions and member states have to take measures,” the EU’s chief diplomat said. “That India buys Russian oil, it’s normal… But if they use that in order to be a centre where Russian oil is being refined and by-products are being sold to us…  we have to act.”

In response to the statement by Borrell, Jaishankar said: “Look at the EU Council regulations. Russian crude is substantially transformed in the third country and not treated as Russian anymore. I would urge you to look at Council’s Regulation 833/2014.”

For her part, European Commission Vice President Margrethe Vestager said the EU would discuss the issue with India, “but it will be with an extended hand and of course not with a pointed finger.”

However, this is unlikely since the European Union has been berating India for its unwillingness to be embroiled in an Eastern European conflict and for bolstering trade ties with Russia. It is recalled that Jaishankar said last December while addressing a joint press conference with his German counterpart Annalena Baerbock: “Our trade with Russia is at a very small level — $12-13 billion, in comparison to European countries. We have also given the Russians a set of products… I don’t think people should read more into it other than the legitimate expectations of any trading country to increase its trade.”

“I would urge you to look at these figures. There is a website called ‘Russia Fossil Fuel Tracker’ that would give you country-by-country data of who is really importing what and I suspect that might be very helpful,” he added.

India has reached a point of influence where it can sideline threats and pressures from the West, especially if it is detrimental to its interests and development. However, just as Western sanctions against Russia have boomeranged against the EU, it cannot be discounted that pressure to make India sanction Russia may force the EU to raise the possibility of easing sanctions.

With countries like India, Brazil and Egypt taking independent actions, it could force Europe to start discussing sanctions relief as it is affecting their own countries far worse than Russia. India has benefited from cooperation with Russia on oil supplies, such as buying oil at a discount and paying in rupees, all the while Europe suffers from high energy prices. 

For India, such cooperation has clear and direct economic and financial implications. It also plays a vital role in developing bilateral trade relations, which generally benefit India and Russia. Borrell is aware that European businesses need to catch up while Russian-Indian cooperation increases. Therefore, Borrell is making fake claims towards India regarding EU regulations to deflect the blame.

Countries that have experienced a sharp increase in gasoline prices will have to think deeper to fix the turmoil in the oil market, which further fuels inflation that is already difficult to deal with. Within this context, Borrell attempted to moralise India in what was supposed to be an upbeat summit in Brussels in the newly created EU-India Trade and Tech Council.

According to Indian state-controlled lender Bank of Baroda, India’s imports of Russian oil rose tenfold last year, equating to Asia’s third-largest economy saving around $5 billion. In 2021 Russian oil accounted for just 2% of India’s annual crude imports, but now that figure is almost 20%.

Despite constant pressure from the West, India has refused to impose Western sanctions on Russian imports. At the same time, New Delhi has not explicitly condemned Russia’s special military operation. India defends its oil purchases due to being reliant on energy imports. With India needing to improve the lives of millions of citizens significantly, the country wants to find the best prices, something Russia offers.

Yet, India should not have to defend its decisions, especially since Europe imported six times more energy from Russia than India, according to Jaishankar in a TV interview last year.

“Europe has managed to reduce its imports while doing it in a manner that is comfortable,” he said, adding: “If it is a matter of principle why did Europe not cut on the first day?”

Effectively, India has demonstrated, once again, that it is fully embracing the Multipolar World Order. Although India is not comparable to the economic might of the US or China, it can defend its interests despite threats. By circumventing EU regulations, Borrell has shown that the bloc is interested in something other than following a rules-based order. Instead, he wants to suppress competitors and challengers.

Source: InfoBrics

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