EU claims of New Delhi acting as a Russian middleman shrugged off in India

In mid-May, Josep Borell, the long-serving European Union High Representative for Foreign Affairs and Security Policy and vice-president of the European Commission, very publicly took issue with imports of Indian fuel into member states of the EU, saying that the bloc needs to crack down on what is essentially the reprocessing and selling on of sanctioned Russian crude oil by New Delhi.

As of May this year India was one of the top buyers of Russian crude in the wake of the February 24, 2022 invasion of Ukraine. China too has been importing record amounts of oil from Moscow, although with discounts having gone down by as much as $2 per barrel this month, volumes moving between Moscow and Beijing may soon start to decline. 

Discounts offered to Indian refineries by Moscow are still in place, though, and have seen New Delhi snap up Russian Urals crude for prices between $20 and $30 per barrel below the Brent benchmark. This saw Russia quickly rise to the top of the suppliers rankings for the subcontinent.

The country is showing no signs whatsoever of cutting back on imports of Russian crude any time soon. With profits up at most major refineries in the country on the back of increased exports to Europe, there is little incentive to do so.

Speaking in an interview published by the Financial Times (FT) in May on the rise in import numbers from India, Josep Borell said: “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.”

It was an issue he raised in subsequent meetings with Indian Minister of External Affairs S Jaishankar not long afterwards.

In the same FT interview it was revealed that India had been importing on average between “970,000 and 981,000” barrels per day (bpd) from Russia between April 2022 and March 2023; a number that for many months saw New Delhi treading a fine line between keeping Western allies on board in ongoing territorial and trade disputes with neighbouring China, and access to cheap oil supplies to fuel what has recently become the world’s most populous nation.

An insistence by New Delhi that it did not need to fall in line with US and EU-led moves against Russia was quietly accepted after months of negotiations, and in large-part India has been left alone since; a friend of both the West, and thanks to cheap oil, Moscow too.  

“That India buys Russian oil, it's normal...” Borell added, seemingly unaware of massive international political pressure on the government of Narendra Modi following the invasion of Ukraine to cut links to Russia.

“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 continued.

His comments only reinforce an increasingly common undercurrent of feeling in Asia, however, that European leaders talking about blocking India’s increased oil sales to the continent are little more than political bigwigs wanting to be heard on the issue without actually being overly serious about addressing it directly.

Prior to Russia’s military aggression against Ukraine, India exported around 154,000 bpd of jet fuel and diesel to the EU. Recent data from Kpler in Belgium shows that following the February 5 ban on Russian oil products by the EU, this number has now risen substantially to around 200,000 bpd. No visible efforts have been reported on moves to stem this flow in the EU, despite the bluster from Brussels, and despite the knowledge that it is more than likely produced using crude imported by India from Russia.

In reality it is impossible to gauge how much of the EU imports from India are actually Russian in origin. And in light of the fact that any serious moves to block shipments from India would only lead to Russia pushing its crude through other avenues, those in India and the wider Asian region claiming that EU talk of action is more about face-saving than preventing real world movement of oil products seem to have a point.

Responding to Borrell’s interview in the FT, Minister Jaishankar urged the Spanish official to look at the EU’s own legislation to this end, saying that moves to prevent Indian imports would be counter to EU rules on fair trade.

“I really don’t see the basis for your question because my understanding of the (European) Council regulations is that if Russian crude is substantially transformed in a third country, then it’s not treated as Russian any more,” the Indian diplomat was quoted as saying in the Times of India.

“I would urge you to look at Council regulation 833/2014,” he added; the aforementioned regulation states in part that “it shall be prohibited to purchase, import or transfer, directly or indirectly, goods which generate significant revenues for Russia, thereby enabling its actions destabilising the situation in Ukraine,  …. if they originate in Russia or are exported from Russia.”

The senior Indian minister, in making the claim that oil exports ‘exported’ from Indian ports are Indian in origin following processing in India, for now appears to have the upper hand.

So much so that when another European Commission vice president, Margrethe Vestager, later appeared to make moves to reduce tensions by saying that when the trading bloc and New Delhi next spoke about the issue “it will be with an extended hand and of course not with a pointed finger.” No mention was made of Borrell or his “circumvention of sanctions” claim.

The angst shown by Europe’s foreign affairs supremo is not altogether alien to Indians, however.

There is an increasing belief in some circles that Indian crude exports to the EU using refined Russian oil are similar in concept to methods employed by international money-laundering rings, an analogy that has appeared in print multiple times in recent months across the subcontinent.

One particularly damning headline, “India leads ‘Laundromat’ countries buying Russian crude and selling oil products to Europe”, seen in the left-wing newspaper The Hindu, one of India’s oldest and most respected newspapers, raised the hackles of many in political circles as well as private industry.

Yet with a population of 1.4bn to consider, and a level of energy infrastructure and power production so large as to be almost incomprehensible to most member nations of the EU, ministers in the Indian capital, Jaishankar included, remain immune to headlines in the anti-government media, for now.

And with little reported movement on the side of the EU, the shipments of ‘Indian’ oil products to Europe continue.