India’s Russian Oil Imports Helped Prevent A Global Polycrisis

Yves here. It may seem as if India is making a tall claim to justify the way it ignored US/EU sanctions on Russian oil, or alternatively, is trying to burnish its credentials as a leader of the emerging Global Majority bloc. On the surface, this claim seems plausible given how the difficulties, as in inability, of poor countries to buy Russian fertilizer due to the sanctions led to a great deal of pushback and pleas for selective carve-outs, particularly from African leaders. Predictably, Western leaders ignored these entreaties.

By Andrew Korybko, a Moscow-based American political analyst who specializes in the global systemic transition to multipolarity in the New Cold War. He has a PhD from MGIMO, which is under the umbrella of the Russian Foreign Ministry. Originally published at his website

Many Global South states were already struggling to deal with COVID-connected debt problems prior to the West’s anti-Russian sanctions worsening their food insecurity, so an energy price crisis on top of that could have pushed them over the edge into an uncontrollable polycrisis that would have also destabilized the West.

A representative of India’s Petroleum and Natural Gas Ministry told a department-related parliamentary standing committee that their country’s Russian oil imports helped stabilize the global energy market and prevent havoc from breaking out according to a recent report from the The Indian Express. What follows are the excerpts that they cited from that event, which will then be analyzed so that the reader can fully appreciate India’s latest contribution to the world:

If they (Indian refiners) had not imported Russian oil into India, which may be a big number of 1.95 million barrels per day, that deficiency would have created a havoc in the crude oil market and the prices would have shot up by about $30-40.

The crude oil market is such that in the market of 100 million barrels per day, if the OPEC (Organization of the Petroleum Exporting Countries) says that they are going to reduce it by one or two million barrels per day, prices increase by 10 to 20 per cent and reach up to $125-130.

If India does not absorb–I would call it absorption–1.95 million barrels per day, these prices would have reached $120-130. It would have created a havoc. Diplomatically, we are a sovereign country and could say that we have been doing what is good for the country as well as the world.

This insight aligns with what was earlier shared in these five analyses from June 2022-March 2023:

* 14 June 2022: “Russian-Indian Energy Diplomacy Helps Delhi Balance Washington

* 30 November 2022: “Russia’s Energy Geopolitics With China & India

* 16 January 2023: “The US Discredited Its Own Sanctions By Buying Refined Russian Oil Products Via India

* 8 February 2023: “The West’s Anti-Russian Sanctions Made India Indispensable To The Global Energy Market

* 1 March 2023: “Russia Will Keep Up The Pace Of Oil Exports To India Despite Increased Chinese Demand

If India hadn’t resisted Western pressure, then the whole international community would have suffered.

To explain, many Global South states were already struggling to deal with COVID-connected debt problems prior to the West’s anti-Russian sanctions worsening their food insecurity, so an energy price crisis on top of that could have pushed them over the edge into an uncontrollable polycrisis. Not only could this have led to spiraling unrest that could have spread throughout this swath of the world, but the security and humanitarian consequences would have also destabilized the West as well.

Those countries among that New Cold War bloc that are dependent on resources and markets there might have felt compelled to launch unilateral military interventions, while large-scale refugee flows could have crashed into their societies with all that entails for exacerbating preexisting tensions. This worst-case scenario was averted through India’s principled neutrality towards the Ukrainian Conflict, which saw this globally significant Great Power resist Western pressure to boycott Russian energy.

If Delhi had capitulated to their demands, then the abrupt removal of so much energy from the market would have plunged it into chaos. The remaining producers couldn’t have replaced Russia’s lost share, thus leading to a competition among the wealthiest countries (namely China and the EU) to purchase their remaining resources. All the while, the debt-beleaguered and newly food-insecure Global South would have been unable to maintain its minimum energy needs, thus setting the polycrisis into motion.

As the unnamed Indian official told parliament, “we have been doing what is good for the country as well as the world”, which highlighted the growing convergence between India’s national interests and those of the international community. This South Asian Great Power practices what can be described as a hyper-realist grand strategy wherein India not only prioritizes its national interests as policymakers conceive them to be, but candidly acknowledges this approach and also details those same interests.

By doing so, India removes all ambiguity about its interests, which therefore makes it the most predictable partner that anyone can have. This policy is premised on the trust that India has cultivated with everyone since they don’t have any reason to question its representatives’ sincerity whenever they speak about their national interests. Some might have different views and even dislike India’s policies, but nobody can credibly claim that those representatives are lying about what that they want and why.

Russian Foreign Minister Lavrov praised this approach and the multialignment that it naturally led to during a press conference with his Indian counterpart on Wednesday when saying that “I believe this policy is not just important for Russia and all other countries around the world, but it is the only policy worth conducting that will ensure respect and reputation and be beneficial in India’s cooperation with other countries that show similar respect to all members of the international community.”

The West will never appreciate what India did for the world, but the Global South is beginning to realize that the polycrisis that many of their officials feared would unfold shortly after the anti-Russian sanctions were promulgated was largely averted through India’s drastically scaled imports of that country’s oil. This stabilized the market, which made it easier for them to manage their debt and food security problems, thus preventing this swath of the world from slipping into full-scale instability to everyone’s detriment.

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  1. Laurie

    That the West wants the rest of the world and their own populations plunged into desparate circumstances is what is incredible. They are still obsessed with creating more suffering by adding more sanctions.

  2. Piotr Berman

    Those claims by Indian government make me wonder what happened to currency controls affecting accounts of Russian oil exporters to India. Seems that some discrete solution was found.

    There were some publications about increased pressure of the West to force “third countries” (India and little players in the global South) to comply with their sanctions. India tries to use levers it possesses to resist, and those arguments contain a lot of truth — how much, hard to tell with hypotheticals. There is definitely a big burden of the Western policies on all countries, and many totter close to a crises, some in full crisis. That said, the size of India makes it hard to ignore, and there are many rich and influential persons of Indian heritage in the West (even some prime ministers…) that can amplify the weight of Indian message.

    An Indian government has to juggle different priorities and considerations, some seemingly contradictory, so it is involved in long term simmering conflicts. Internal, with Indian Muslim, external with Pakistan and China, then the need to bolster the economy with sanction breaking and maintaining export market and investment links with the West and Japan. And internally, it lacks sufficient domestic savings/investments, it has to borrow against its prospects of growth. Modi shares various traits with Erdogan, domestically nationalistic, religious, pro-business with populism, internationally, dabbling with conflicts and manipulating variable distance to various blocks. Perhaps because of more quiet environment, Modi makes a better job in keeping his international conflicts on low simmer (patient simmering is the essence of Indian cooking).

    1. fjallstrom

      After the previous discussion about currency and payments between India and Russia, and Russian demands of being payed in Chinese currency I had a look at Indian trade at Trading Economics (India imports, India exports).

      India has large and sustained deficits in trade with many trading partners. Most notably China, but also Russia, UAE, Switzerland. It has surplus against US and Netherlands (could be a reporting issue with Netherlands as some EU trade can be registered in Netherlands but having other destinations). But the surpluses are not near covering the deficits.

      It would even appear that India exports less to China than it’s trade deficit with Russia, so even ignoring Chinese exports to India, there wouldn’t be enough Chinese currency to pay Russia.

      In short, if they solved it I would be very curious as to how. And in general I am curious how India manages to have such large and persistent trading deficits.

      1. Saurabh Goyal

        India has sustained, large inward remittance in excess of USD 100 Billion annually. That’s one source.

        I also believe that Russian oil imports were in bilateral currency arrangements. In simple terms, I believe that Russia is holding significant amount of Indian Rupees and is trying to balance this out by importing all manner of goods from India.

        This is anecdotal – so I may be wrong.

        1. fjallstrom

          Remittances would explain a lot, thank you.

          What Piotr Bemrna and I refered to was an earlier discussion, which I unfortunately can’t find, when a month or so ago Russia protested that it had found little use for rupees and instead wanted to be payed in renminbi (presumably to buy goods from China). It would be nice to know how that was solved, or if the can was simply kicked down the road.

    2. King

      One thing most of the West has got wrong is thinking Modi is a religious or a religious hardliner. All his policies have been to bring everyone onto universal laws, like no triple talaqs, no Halalas of women, Alimony to women post-divorce, and more women’s rights whichever religion they might be from. He is the most central figure in world politics as he is not leaning to the left which a lot of world leaders are and he is not leaning to the right as many hardline Islamic leaders or similar leaders in India are. In fact his precursor, congress was so much leaning to the right regarding religious fundamentalism that they had made a separate rule for Muslims which followed Sharia law separate from the rest of Indian citizens including Christians and other religions. Check the Muslim law passed by Nehru and also the Shah Bano case in the 1990s by Rajiv Gandhi.
      Anyway just my 2 cents

  3. Xquacy

    Korybko is playing up India’s role in ‘helping’ the world for some other ends. All that cheap Russian crude has done little to affect gas prices in India, which remains an eye watering 1.2$/L, since July 2021. I suppose one might call it ‘national interest’ to cut taxes on fuel from a 2021 high of 34 cents/L to 24 cents/L, maintaining the prices at 1.2$/L, while the oil companies raked up a 2.5$ billion profit this year, from fuel sales via Russian crude.

    So yeah India’s ‘national interests’ are bound to converge with those of ‘international community’ when its policy makers are prepared to impoverish Indians to raise a few global prestige points.

    1. Paris

      Nobody believes the Indians were doing that to be “nice” to the world lol. They bought cheap oil and that’s it. That whole part about “helping the world” made me laugh hard here.
      Now, why doesn’t he mention the Chinese? They are bigger and richer than the Indians and bought a lot of cheap Russian oil too.

      1. Samurai Brains

        There was a lot of pressure on the govt (amplified by the west leaning English media) to be on the “right side of history”. Any previous govt would have capitulated. Some credit needs to be given to the current government…

        No doubt, the primary ulterior motive was to manage the economy and the livelihood of citizens. That does not negate the secondary effects of helping the global markets. In fact, I think this is acknowledged by the west and was allowed for various reasons

        1. Saurabh Goyal

          One of India’s largest private oil and gas companies is Reliance Industries, whose owner Mukesh Ambani is one half of the Adani-Ambani grouping that has disproportionately benefited from the policies/support of the current regime.

          Reliance imported and resold further thereby making a pretty penny.

          The government is desperately trying to mop up as much money as it can to fund its social programs. It cannot afford to reduce petrol prices. Despite the high GDP growth numbers being touted by the media, and the government, the rural economy is suffering. Consumer goods that are a good barometer of consumer spending, shows a CAGR ~ 1-2% over the past 5 years. Which is why free food programs are being extended in terms of reach and duration.

          Whether previous governments would have capitulated – it’s difficult to be sure. Times have changed.

          1. king

            All the evidence we have would suggest any other Indian government would have capitulated to Western pressures on various issues. No one can predict exactly what would have happened as it is impossible but hearing the soundbites from most opposition parties we can assume they would have towed the Western policies as they stated when rallying against the present government. About Reliance–Ambani–they came to prominence during Congress governments and were close to a lot of Congress politicians. Adani has been given contracts in Congress-ruled states and if he was just close to the central or BJP-led government then Congress would have rejected his contracts in Rajasthan etc. Truth is Congress ruled India for 60 odd years and was responsible for most mismanagement of the economy despite claiming that the most recent 10 years of Congress government ushered new changes. Some of these changes were brought in during the short-lived BJP government led by Vajpayee and then 10 years of a very corrupt Congress reign started post that.

            1. Paul Art

              Agree. Businessmen cozy up to ALL politicians and vice-versa. But from my experience and reading uou van bet good money that any hypothetical Congress government coalition would have promptly caved to the USA. This is precisely what happened with the Manmohan Singh Congress government in the 1990s. Almost all of India’s labor laws were rolled back needlessly. I am definitely not a Modi fan being Christian from India but I take my hat off to him for showing great courage in telling the Yanks to shove off.

          2. Samurai Brains

            Consumer goods that are a good barometer of consumer spending, shows a CAGR ~ 1-2% over the past 5 years.

            The value growth was 7.6%, 10.2%, 12.2% and 9.0% in the last four quarters (Oct-Dec 2022, Jan-Mar 2023, Apr-June 2023, Jul-Sept 2023)
            The volume growth in the respective quarters were -0.3%, 3.1%, 7.5%, 8.6%.

            While rural consumption was -3.6% in Jul-Sept 2022, it is now 6.4% in Jul-Sept 2023.
            Source: Business Standard: FMCG industry logs 8.6% volume growth in Q2 on rural revival: NIQ

            I have no clue where you got the 1-2% number. It is not factually correct
            Source: FMCG Industry in India: Sector Overview, Market Size & Growth”. IBEF

            In any case, this article is about the govt claiming to have helped prevent a global polycrisis. In hindsight, there is some basis to that claim… And everyone knows that the main reason was not geopolitical in nature. It was a selfish decision to avoid a second shock to the economy/people (after covid). The prevention of a polycrisis is just a happy side-effect…

  4. The Rev Kev

    This is a bit like the guy that gets lucky and buys a winning lottery ticket and tells everybody that he is such a prudent investor and great guy that he will be spending all his money in the local economy. So can we get serious now? This all arose about two years ago after the outbreak of the war and there is no telling how long that it can go on for. So let’s take a look at the underlying premise that makes what we read in this article possible at all.

    The EU and the EU could continue to buy Russian oil direct at a reasonable price. Instead, through a combination of pride, arrogance and not wanting to look weak in front of their populations, the US and the EU are watching Russian oil be shipped to places like India where, after the appropriate mumbo-jumbo is muttered over it, all the Russianess is removed from that oil whereupon those western countries buy that oil at a much marked up price and make their citizens pay through the nose for it. But when you say it this way, it sounds stupid.

  5. Paul Damascence

    I do wonder if at some point, Russia abandons the last vestiges of neoliberal globalization and moves to form cartels–a la OPEC–with other partners, and impose embargoes and punitive tariffs on sales to the neo-colonial West, especially on strategic materials. Russia could conceivably form cartels with Africa to ensure that they finally set, demand & receive fair world prices for commodities such as uranium.

    Indeed, assuming that Russia reaches what it determines to be a sustainable level of decoupling from the West, & reorientation to the Rest of the World, it’s conceivable that even on its own, Russia might offer discounts to players such as India, for every unit of Russian oil that India refines & voluntarily does NOT re-export to the West, redirecting those sales instead to Russia-friendly countries. So if India buys X & re-sells .4X to West, and .2x to Rest of World, Russia offers India a discount on the .6X–in effect charging full price only on volumes equivalent to re-export to West.

    strategic material cartels:
    natural gas (w/ Iran & Qatar, they’re nearly there)
    uranium (w/ Kazakhstan, Niger, etc.)
    rare earths (w/China)
    sapphire substrates
    lithium (w/ Iran, Bolivia, etc.)

      1. Paul Damascene

        Apparently also with fertilizer. A story today on the release from a Lithuanian? port of formerly blockaded Russian fertilizers bound for Nigeria.

        1. CA

          October 22, 2023

          China’s fertilizer exports soar 31.6 pct in Jan-Sept period

          BEIJING — China exported 22.67 million tonnes of fertilizers from January to September, a surge of 31.6 percent year on year, according to data from the General Administration of Customs.

          In September 2023 alone, the country exported 3.77 million tonnes of fertilizers, up 20.3 percent year on year.

          Among the different types of exported fertilizers, urea exports recorded the fastest growth last month, skyrocketing 241.7 percent from a year ago.

          Urea exports reached 2.83 million tonnes during the first three quarters, an increase of 80 percent year on year, data showed.

    1. CA

      Ben Norton @BenjaminNorton

      Very interesting minutes of the first meeting between Mao Zedong and India’s progressive anti-colonial leader Nehru, in 1954.

      Mao said: “Historically, all of us, people of the East, have been bullied by Western imperialist powers… China was bullied by Western imperialist powers for over 100 years. Your country was bullied even longer, for more than 300 years”. “Therefore, we, people of the East, have instinctive feelings of solidarity”.

      “In spite of differences in our ideologies and social systems, we have an overriding common point, that is, all of us have to cope with imperialism”.


      11:06 PM · Dec 27, 2023

  6. Rubicon

    It’s our understanding that Indian WEALTH is centered in their Ultra Wealthy citizens. They call the shots and control their politicians to favor trading/investments that benefit the Wealthy FEW. In the meantime, multiple millions of Indians and cultures in India remain hopelessly impoverished.

    My question re: Russia – who is trading w/ India? The Russian Aristocrats, or Putin’s government?

    And, to think that before the British Empire took over, they were one of the wealthiest nations in the world.

  7. CA

    Just a few days from now, Saudi Arabia, United Arab Emirates, Algeria and Iran will become part of BRICS and the BRICS New Development Bank. Also, China is pre-eminent in renewable energy resources and is developing home designed 3rd and 4th generation nuclear power plants. Essentially BRICS+ will be an energy resource organization.

  8. TomW

    The US is sanctions crazed. The flip side being that they also are the min enforcer of sanctions as well as the only enforcer of unilateral sanctions.
    As a result, the US has a particular expertise is ignoring or not enforcing sanctions when they become too unpopular or too expensive or inconvenient. They will openly select dates to begin enforcement which suit its interests, without blinking. Then there are things like the potentially catastrophic Russian oil sanctions. Granted, the US is both a huge producer and a huge consumer of oil. But it never wanted to take all that oil suddenly out of global markets. So it didn’t.
    Europe failed to recognize this tactic as an essential strategy of the US global rules based order, and allowed its economy to be decimated.
    The most the US could afford was to throw some sand in the gears of Russian exports. So it did.

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