'Waiting For Thank You': India's Foreign Minister Claims Country's Policies Softened Oil Markets Amid Russia-Ukraine War

India, which has lapped up discounted oil from Moscow since the Russia-Ukraine war began, deserves a "thank you" for playing a role in softening global oil prices, claims Foreign Minister S Jaishankar.

The minister asserted India's role in managing global inflation through its strategic purchase policies.

"We've actually softened the oil markets and the gas markets through our purchase policies. We have, as a consequence, actually managed global inflation. I'm waiting for the thank you," Jaishankar said at an event, titled "How a billion people see the world," in London on Wednesday.

The Indian minister said global oil prices would have surged if India had also gone to the same suppliers that Europe had approached.

"When it comes to the purchase...I think the global oil prices would have gone higher because we would have gone into the same market to the same suppliers that Europe would have done and as we discovered Europe would have out-priced us," he added.

Citing the liquefied natural gas (LNG) market as an example, Jaishankar said India at least had enough clout to "command some respect" while smaller countries suffered.

"We saw that in the LNG markets where actually many supplies, which were traditionally coming into Asia, were diverted to Europe and in fact at least India was a big enough country to command some respect in the markets but there were much smaller countries who didn't even get responses to their tender in Paris because the LNG suppliers were no longer interested in dealing with them," Jaishankar added. "They have bigger fish to fry."

Hari Seshasayee, a visiting fellow at the think tank Observer Research Foundation (ORF), said no single country can take credit for stabilizing oil prices and that New Delhi was simply acting in its own interests when it turned to cheaper Russian oil imports for its energy needs.

"I think the foreign minister's statement that India has 'actually managed global inflation' is incorrect. Oil prices are determined by a variety of factors, and it would be unfair for one country, i.e. India, to take credit for stabilizing it," Seshasayee told International Business Times. "India and Indian oil companies have simply acted in their interests, and no one needs to thank them for that."

The Russia-Ukraine war that began in February last year led to dramatic changes in the global energy landscape in addition to causing geopolitical rifts. India's strategic ambivalence after the invasion of Ukraine allowed the South Asian country to maintain ties with both the West and Russia.

New Delhi was reluctant to condemn Russian aggression, refused to join the West's sanctions and also upped its imports of Russian oil. Nevertheless, India is still in the sweet spot as it delicately balances its relationship with Washington and Moscow.

"India's continued reliance on Russian crude oil post the Russia-Ukraine conflict involves intricate economic, geopolitical and strategic dynamics," Manish Vaid, an ORF researcher with an interest in energy policies and geopolitics, told IBT. "India has notably increased its Russian crude imports due to substantial discounts offered by Russia, nearly doubling in the past two months to $8-$10 per barrel, as state refiners applied pressure on Russia by reducing their oil intakes. However, these discounts are lower than those offered to European refiners due to increased costs and limited Russian suppliers for non-European buyers."

Seshasayee said India's import of cheaper Russian oil is purely a "business decision" and should not be seen as a geopolitical move.

"There has been a disconnect in the framing of India's increasing oil imports from Russia – it has erroneously been portrayed as a geopolitical decision, but in fact, it is a business decision," Seshasayee said. "Indian oil companies import Russian oil because it makes business sense; it is cheaper, and since Russia has very few customers, it is what analysts call a 'buyer's market.'"

Moscow today faces a flurry of Western sanctions to limit global purchases of Russian oil. However, India has used the situation to its advantage and allowed Russia to become one of its top suppliers of crude oil. On the side, New Delhi still woos the West and deepens its cooperation with Quad partners.

Defending its oil purchases from Russia, India said its energy security needs and developing economy did not offer the luxury, as it did for the West, to make morally right purchases of oil instead of cheaper ones.

Jaishankar "defended buying Russian oil, citing India's duty to secure affordable energy. India's oil purchases, a fraction of Europe's, hold significant global sway," Vaid said. "Despite sourcing from 42 countries, the top 20 countries consistently supply over 95% of India's oil. Opting not to compete directly with Europe during the Russia-Ukraine conflict likely prevented global oil price surges. However, the complex oil market's volatility extends beyond India's policies, impacting global dynamics extensively."

Only a few years ago, in 2019, New Delhi gave up its political and economic interests and stopped buying oil from Iran — previously one of India's top three oil suppliers — due to the West's threat of secondary sanctions on companies that continued to buy Iranian oil. India had also stopped buying oil from Venezuela around the same time after the U.S. imposed sanctions on its national oil company, Petróleos de Venezuela (PDVSA).

Today, India's balancing act reflects "the complexities of modern international relations," Vaid noted.

"Despite pressure from the U.S. and Europe, India's refusal to comply with sanctions on Russian imports emphasizes its independent foreign policy and alliance with Russia," he said. "In essence, India's choice to persist with Russian crude imports is a complex balancing act involving energy security, financial considerations, and geopolitical partnerships, showcasing the complexities of modern international relations."

Seshasayee believes India will continue to import Russian oil as long as secondary sanctions are not imposed.

"Till today, no country has imposed secondary sanctions on the import of Russian oil, akin to the U.S. secondary sanctions in place for Iran. This means there are no legal restrictions to buying Russian oil, and as long as this is the case, Indian oil companies will continue buying discounted Russian crude," he added.