(Reuters) – The European Union should crack down on India reselling Russian oil into Europe as refined fuel, including diesel, EU foreign policy chief Josep Borrell said in an interview with the Financial Times published yesterday.
India has emerged in the past year as a top buyer of Russian oil following Moscow’s invasion of Ukraine on Feb. 24, 2022. Access to cheap Russian crude has boosted output and profits at Indian refineries, enabling them to export refined products competitively to Europe and take a bigger market share.
Borrell told the newspaper he would raise the issue with India’s foreign minister, Subrahmanyam Jaishankar, at a meeting in Brussels.
“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,” Borrell said.
In remarks after the meeting, Borrell said he had brought up Russia’s invasion of Ukraine, including the issue of food security, in his talks with Jaishankar, but his remarks did not refer to Russian oil.
Jaishankar told a news conference his understanding of EU sanctions rules was that Russian crude substantially transformed in a third country was no longer considered to be a Russian product.
European Commission Vice President Margrethe Vestager said the EU would have a discussion with India on the issue “but it will be with an extended hand and of course not with a pointed finger”.
Indian refiners, which rarely bought Russian oil previously due to high transport costs, imported 970,000-981,000 bpd of it in fiscal 2022/23 (April-March), accounting for more than a fifth of the country’s overall fuel imports.
Russia’s largest oil producer Rosneft ROSN.MM and top Indian refiner Indian Oil Corp IOC.NS have also signed a term deal to substantially increase and diversify oil grades delivered to India.
According to ship-tracking data from Kpler, Reliance Industries RELI.NS and Nayara Energy were the key exporters of refined fuels and buyers of Russian oil.
No immediate response was available from the companies.
India typically exported an average of 154,000 barrels per day (bpd) of diesel and jet fuel to Europe before Russia’s invasion of Ukraine. However, that has increased to 200,000 bpd after the EU banned Russian oil products imports from Feb. 5 this year, data from Kpler shows.
Any mechanism to stem the flow of Russian oil would need to be implemented by the national authorities, Borrell told the FT, suggesting that the EU could target buyers of Indian refined fuels which it believes are derived from Russian crude.
“If they sell, it is because someone is buying. And we have to look at who is buying,” he said.
