Europe Closed Front Door, But Opens Backdoor – How India Makes Easy Money Reselling Russian Cheap Oil To EU

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May 01 2023
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Having learned from China, a country called India is making tonnes of easy money by buying crude oil from Russia before selling it to the EU. The fast learner has become Europe’s largest supplier of refined fuels, according to data from analytics firm Kpler. In March alone, India’s imports of crude oil from Russia touched a new high of 1.64 million barrels per day.


In April, Russian oil to India is expected to surpass 2 million barrels a day – almost 44% of the nation’s overall oil imports. If you have no idea how significant this is, India was buying less than 1% of its oil from Russia before the start of the Russia-Ukraine conflict in February 2022. Iraq was India’s top oil supplier, till Russia’s discounted oil disrupted the global oil market.


India’s second largest supplier of crude oil is now Saudi Arabia, followed by Iraq in the third spot. Once crude arrives from Russia, India either quickly re-exports or processes it first into diesel and gasoline, and then sells it to European customers like France, Belgium and the Netherlands. In other words, Europe, despite sanctioning Russian oil, is still buying the forbidden Russian oil.

India Import Cheap Russian Oil

The only difference is, Europe buys from a “middle man” (India), who makes about US$25 a barrel (almost a third of the price of a barrel of crude oil), exactly the same Russian oil that European buyers refuse to buy directly from Moscow for a much lower price. India’s profit margins would be even greater for refined products such as gasoline, diesels or jet fuel.


India has 23 oil refineries capable of refining 249 million tonnes of oil a year, making it the world’s fourth-biggest refiner. Asia’s richest person Mukesh Ambani’s Reliance Industries runs the world’s largest refinery in Gujarat, where he has ramped up purchases of Russian oil. Together with India’s second-largest refiner Nayara – of which Russia’s Rosneft owns 49% – Reliance imports 45% of Russian crude.


Clearly, the wishful thinking that sanctions imposed on Russia would cripple and defeat the Kremlin has boomeranged on the Western nations instead. In March last year, President Joe Biden told the world that the war in Ukraine has been “a strategic failure” for Russian President Vladimir Putin. Heck, the U.S. president even mocked that the Russian ruble had been reduced to “rubble”.

US President Joe Biden and Russia President Vladimir Putin

However, the opposite has happened instead. Not only Russian ruble has emerged as the best-performing currency in 2022, its economy failed to collapse as trumpeted by Biden and Western media. Worse, the U.S. and NATO, running out of ammunition, are under pressure as Russian continues to rain missiles and “kamikaze drones” in Ukraine.


China, a nation that imports about 70% of its energy, too, has been laughing all the way to the bank since last year – buying Russian oil and selling to Europe. In the same month that Joe Biden mocked the demise of ruble and fantasized how the U.S. could easily beat Putin, China has already started re-selling several U.S. liquefied natural gas shipments to Europe.


Yes, as early as March 2022, China simply re-export to the desperate European Union the same LNG which the Chinese bought from the United States and made huge profits without lifting a finger. At the same time, the Chinese also bought the commodity from Russia before selling it to Europe. Of course, China and Russia were working hand-in-glove by creating a shortage.

China Oil Tanker

As gas prices in Europe skyrocket after Moscow slashed supplies to its biggest market, at the same time, Russia’s giant state-owned energy company Gazprom boosts natural gas shipments to China. Thereafter, China would repackage and resell the Russian LNG as Chinese LNG to bypass sanctions, and voila, both Beijing and Moscow laughed all the way to the bank.


Natural gas delivery over pipeline should not be confused with liquefied natural gas (LNG). They are gaseous in different form. LNG is natural gas that is cooled to -260° Fahrenheit, the temperature at which natural gas becomes a liquid, so that they can be transported using special LNG tankers. This is how Europe gets its natural gas after Putin turned off the taps.


Hilariously, not only the West closes one-eye over the Chinese-Russia business trick to profit from Europe’s silly strategic mistake, the British daily newspaper Financial Times had actually praised China as the white knight who saved Europe from a brutal winter last year. And thanks to the Chinese, Europe’s imports of LNG grew 60% year on year within the first six months of 2022.

Xi Jinping and Vladimir Putin - Toast

To save face and to justify Europe’s import of Chinese LNG, which was actually Russian LNG, the West lied that it was “excess LNG” from China. And Beijing knew it could easily repackage and resell it to Europe because both the desperate EU and the U.S. will close both eyes – allowing the Chinese to breach the same sanctions the U.S. had designed.


India, the world’s third-biggest oil-importing and consuming nation, has defended purchases of crude oil from Russia despite criticisms from the U.S. and E.U. Lecturing the West, India said what it buys from Russia in a month is less than what Europe buys from Russia in an afternoon. There’s nothing the U.S. could do to stop its ally India from buying discounted Russian oil.


Washington could only urge New Delhi not to buy too much Russian oil. It’s not rocket science to see how China and India are helping the Russian economy at a time when the U.S. desperately wanted to cripple it. The Kremlin isn’t suffering any adverse consequences from Europe’s laughable “sanctions.” Instead of isolating Russia, the sanctions have made China and India top customers of Russia.

Russia President Vladimir Putin and India Prime Minister Narendra Damodardas Modi

In fact, Moscow openly declared last month, obviously to mock and laugh at the U.S., that Russia has successfully redirected all its crude oil exports affected by Western sanctions over Ukraine to “friendly” countries. It does not mind letting China and India profiting from the reselling of Russian crude to Europe as long as it could bypass the half-baked sanctions.


To make Russian oil even more difficult to trace, demand for oil storage tanks in Singapore is also surging – suggesting that Russian fuel is being blended with other oil and re-exported. Taking a page from heavily-sanctioned Iran, Moscow has built up a “shadow fleet” of up to 600 old oil tankers to evade Western sanctions.


While the West’s 5 largest oil and gas companies – Chevron, ExxonMobil, Shell, BP and TotalEnergies – saw profits skyrocketed to US$195 billion in 2022 (ExxonMobil alone made US$56 billion in net profit), nearly 120% more than the previous year before the Ukraine War began, Europe had to pay US$1 trillion extra last year as a result of surging energy costs.

De-Dollarization - US Dollar and Chinese Renminbi Yuan

Besides paying the extra US$1 trillion, both Europe and the U.S. have to fight escalating inflations while achieving none of its embargo objectives. Russia is still funding its war machines today. The energy crisis has triggered not only unnecessary inflations as high as 12% in the United Kingdom last month, but could lead to a recession this year, not to mention triggering de-dollarization.


Europe has merely closed its front door, but quietly opens the back door to welcome Russian oil. But India isn’t the only country taking advantage of the Western’s screw-up. Turkey has also emerged as a top buyer of Russian energy crude oil and coal, with Pakistan and even Bangladesh potentially following suit and ramp up Russian energy imports at discounted prices – and probably resells to the West.


The best part is the European Union had to pretend that the Chinese gas was legitimate and China had saved them – even though the gas originated from Russia. Likewise, the toothless Europe can no longer criticize India’s refusal to condemn Vladimir Putin’s invasion of Ukraine as the 27-nation bloc shifts reliance to India from Russia for gasoline, diesels and jet fuel.

Ukraine War - Europe Energy Crisis - Don’t Pay UK Boycott

China and India now account for roughly 90% of Russia’s oil. In the first quarter of 2023, Russia’s seaborne crude oil exports totalled 3.5 million barrels per day versus 3.35 million barrels in the previous year. This means Putin has successfully navigated – even defeated – Western sanctions to the extent of exceeding “pre-war” oil exports level.


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