Russia is building an alliance with India. He sells them cheap oil

Russian oil exports to India are expected to continue rising as the two countries build a long-term relationship based on low prices, according to a senior analyst at Kpler. According to Victor Caton, the reorientation of oil export flows from Moscow to the Asian country will continue, as it is mutually beneficial.

Russia depends on the Indian market

“The whole story between India and Russia is a long story that will not stop suddenly. This will be a new feature in the market,” said Katona, chief oil analyst at analyst firm Kpler.

While China is a major importer of Russian oil, Moscow has a vested interest in maintaining trade ties with India, which has become an increasingly important market for Russia after the G7 countries imposed a price cap and other sanctions aimed at reducing Russia’s trade revenue. energy resources. .

Trade after the war

Katona believes that even if the war in Ukraine ends, discounts will almost certainly remain, and prices may fall from what they are now. He estimates that India is paying about $10 to $12 below the price of Brent crude oil futures.

“Russian oil is now overvalued in the long run. So yes, if the war was over, India would still be buying it because the discounts make it interesting for them,” he said.

Russian oil flows to India

Last year, India bought almost no Russian oil, but this year it is buying record volumes at a reduced price after other countries pulled out of Moscow.

The country is also gradually buying new energy sources such as diesel from Russia that it has not bought in the past. This is a signal of even stronger trade relations between them.

“India buys not only Russian oil, but also Russian products. In a way, it expands what they buy so it’s not just one thing they’ve bought before, but they’re slowly acquiring new things as they go along the path,” Katona said.