Top executives of major Russian energy companies are attending the India Energy Week summit this week, as Moscow and New Delhi vow to strengthen their energy ties and expand economic cooperation.
The world’s third-largest oil importer, India, has started to ramp up purchases of Russian energy after Western sanctions forced Moscow to offer discounts on its exports in an effort to find new buyers.
Over the last year, New Delhi has grown from a marginal buyer of Russian oil to become Moscow’s top consumer. Even after the EU embargo on crude exports and a price cap were imposed India continued to buy large volumes of Russian energy resources. In December alone, Moscow supplied a record 1.17 million barrels of crude a day to India.
Speaking at the summit, CEO of Russian oil major Rosneft, Igor Sechin, said that the Urals blend oil price would no longer be set in Europe, and that Asia was now the largest market for Russian crude.
“If Russian oil does not enter the European market, then there is no reference price. Reference prices will be formed where oil volumes actually go,” Sechin pointed out.
India has started importing a wider variety of Russian crude, including lesser-known Arctic grades. The country’s officials have repeatedly said that New Delhi will continue to pursue an independent policy and is looking for stable energy ties with Russia, adding that “oil does not carry the stigma” of any country.
“Today we feel confident that we’ll be able to use our market to source from wherever we have to, from wherever we get beneficial terms,” Indian Oil Minister Hardeep Singh Puri said.
In a further sign of increased energy cooperation between the countries, the CEO of Russia’s largest independent gas producer Novatek, Leonid Mikhelson announced that his company is in talks with India over long-term contracts on supplies of liquefied natural gas (LNG).
He also revealed that the sides were considering settling LNG supply payments in national currencies – rupees or rubles – bypassing US dollar transactions.