The Western sanctions on Russian energy are already falling apart! Before Trump could act, India’s Modi has already made his move. It seems like New Delhi has taken it upon itself to thwart European and US sanctions. Just see this: Russia and India have signed the largest ever crude oil deal yet, which will see India’s Reliance Industries import nearly 500,000 barrels per day from Russia’s state oil firm Rosneft.
It’s a 10-year agreement. The deal is worth $130 billion at today’s prices for all 10 years.
This is huge! The deal will make sure Russian economy and especially its energy sector remains hot irrespective of EU’s pivot away from Moscow. The deal essentially makes Russian economy sanctions-proof for the coming decade.
Over one-third of India’s energy imports come from Russian oil. After the EU stopped buying Russian oil owing to sanctions following invasion of Ukraine, India became Russia’s biggest oil buyer.
India doesn’t have sanctions on Russian oil, so its refineries are taking full advantage of the cheaper supply. These sanctions have reduced the price of Russian oil, making it $3 to $4 cheaper per barrel compared to other types of oil. Russia’s oil deliveries to India doubled last year to $45 billion. The exports of mineral fuels to New Delhi also jumped by 7% between January and September this year.
Bilateral trade between India and Russia has grown significantly over the past two years and currently stands at $66 billion. Moscow and New Delhi have set a target of reaching $100 billion in bilateral trade by 2030.
India is doubling down on oil trade with Russia after Trump’s victory in US. Trump is a pragmatic politician and knows Russia must not be abandoned to keep China from usurping it virtually.
Trump has previously said he doesn’t like sanctions when it came to Russia. Trump’s approach to foreign policy often revolves around forming personal ties with key leaders. As per retired Lt. Gen. Keith Kellogg, who has been tapped for the role of US envoy for Ukraine crisis, Trump sees sanctions and brute force as last resorts, not first options.
This means that when it comes to issues like the Ukraine war, Trump is likely to try to talk things out with Russian leader Vladimir Putin instead of imposing more sanctions.
First thing first, US and EU sanctions on Russia have failed miserably but still they kept on piling thousands of sanctions on Moscow just for headline management. Trump’s view on sanctions is different; he has previously mentioned that he “doesn’t love sanctions” because they push countries away from the United States. If Trump decides to reduce or remove these sanctions, Russia could regain access to international markets that have been restricted.
Meanwhile, India and China will anyway keep importing Russian energy irrespective of US policy given their clout in international markets.
Some experts believe that Trump’s personal connection with Vladimir Putin and his view on sanctions make it likely that he will ease U.S. restrictions on Russia
But Trump is still 50 days away from assuming charge as the 47th president of the US. Before he could make any move, India’s Modi has already made his intentions clear: Russia is too big to be ignored. In fact, there are reports that Delhi might soon host Putin in the beginning of the new year, a sight that is sure to trigger anxiety in Brussels, Kyiv and for the US deep state.
