Official Russian energy says US sanctions shouldn't hinder oil trade with India

The latest sanctions by the United States against Russia shouldn't affect the oil trade between Moscow and India, Pavel Sorokin said, Russia's first vice minister of energy, on Tuesday. He added that it is too early to determine the effects.

India has become the largest buyer of Russian oil shipped by sea at a discounted price after Western nations implemented sanctions against Moscow and reduced their energy purchases as a response to Russia's invasion in Ukraine in 2022.

Washington imposed new sanctions last month targeting Russia's supply chain for oil. This caused tanker freight prices to skyrocket as buyers in China and India avoided sanctioned vessels.

Sorokin said at the India Energy Week Conference that "our relationship with India is built on economic pragmatism".

He said: "We don't believe that politics should hinder the energy trade."

Sorokin stated that it is too early to gauge the impact of recent U.S. Sanctions.

"You can't judge the situation based on a few weeks worth of data." He said that more time was needed to evaluate these things. "We believe constructive relationships will continue be successful," he added.

The Russian supply to India dropped in December and in January compared with the previous six months.

Indian Oil Corp., the nation's largest refiner, warned last month of a possible drop in its Russian crude oil imports for the fiscal year that ends March 31. This is due to the latest U.S. sanction against Moscow.

A S Sahney, chairman of IOC, told reporters at the sidelines of a conference on Tuesday that the company is not buying Russian crude through sanctioned entities.

Sorokin claimed that the sanctions were illegal and had taken a heavy toll on global economics.

He said that "tens of billions" of dollars were taken from developing countries, which also led to a rise in the cost of capital.

"Sanctions add an element of uncertainty to a sector such as energy, where projects are subjected to very long lead-times."

He said that Russia has all the necessary technology to develop its natural resources, and it will continue to play a major role in the global economy. (Reporting and writing by Nidhi verma, Florence Tan, Himani Sarkar, Sonali Paul).

(source: Reuters)