Saturday, June 04, 2022

China and India happy to increase imports of Russian crude, morality be damned

As most of the world buckles down and sanctions Russian oil, often at significant cost and inconvenience to themselves, in an attempt to reduce Russia's ability (and perhaps inclination) to prosecute its war in Ukraine, two countries are notable no-shows. These mavericks will happily benefit from Europe and the rest of the world's belt-tightening on Ukraine's behalf, with no trace of embarassment or shame.

China is probably no surprise. It is a half-hearted supporter of Russia, but it tends to do whatever it likes, with no concessions to international norms or geopolitical concern or respect. China is the world's largest importer of crude oil; if it can take advantage of cheap Russian crude, then it certainly will, international disapproval be damned. China has quietly increased its imports of Russian crude from 750,000 barrels per day (bpd) in the first quarter to 1.1 million bpd in May, and it will probably continue to ramp up its Russian imports.

India, though, may have been expected to be a little more judicious in its consideration of the flow of international politics, although, under the hyper-nationalist and increasingly swaggering leadership of Narendra Modi, it too is increasingly forging its own path. 

Certainly, in the area of Russian oil imports, India has made no bones about its intention to buck the international Zeitgeist, and to avail itself of as much cheap Russian oil as it possibly can. A year ago, in May of 2021, India imported 136,774 bpd. This May, two months into the Russian invasion of Ukraine, at a time when most countries are deliberately trying to curtail their dealings with the Russian aggressor, it imported 840,645 bpd. That's a six-fold increase. In June, it is expected to increase its imports to 1.05 million bpd (a nearly 8-fold increase).

Clearly, India is not feeling any moral qualms or perturbation. Under Mr. Modi, it is all about them. They would happily see the war in Ukraine drag on as long as it continues to get cheap oil. 

There is a slight (if growing) chance that China and India may suffer some secondary sanctions, as third countries sanction petroleum products refined in India and China which use Russian crude imports. In the meantime, though, both countries are making hay (or oil) while the sun shines, throwing Russia a lifeline in the process and indirectly contributing to the horrific loss of life in Ukraine.

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