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India Should Not Boost Russian Oil Imports, US Official Warning: Report

India is devising a mechanism to settle trade with Russia, including payments in rupee. (File)

New Delhi:

A significant increase in Russian oil imports by India could expose New Delhi to “huge risks” as the United States prepares to increase the enforcement of sanctions against Moscow because of its aggression on Ukraine, a senior U.S. administration official said.

While current U.S. sanctions against Russia do not prevent other countries from buying Russian oil, the warning raises expectations that Washington will try to restrict other countries ’purchases to normal levels.

The US official’s comments were made ahead of Russian Foreign Minister Sergei Lavrov’s two -day visit to New Delhi and during the ongoing visit of US deputy national security adviser for economics Daleep Singh.

Filters in India, the world’s third -largest oil importer and consumer, have been taking Russian oil through spot tenders since the war broke out on Feb. 24, taking advantage of huge discounts when other buyers backed away. India has bought at least 13 million barrels of Russian oil since February 24, compared to nearly 16 million barrels in all of 2021.

“The US has no objection to India buying Russian oil provided it buys it at a discount, without a significant increase from previous years,” the source said on condition of anonymity. “Some increases are allowed,” said the source, who did not offer further details.

The State Department is aware of talks between Russia and India over oil purchases, a spokesman said. “We continue to engage our partners in India and around the world on the importance of strong collective action, including strong sanctions, to pressure the Kremlin to end its devastating war of choice against Ukraine as soon as possible,” the spokesman said.

The Biden administration is coordinating with India and European countries to reduce the impact of Russia’s aggression on Ukraine on the energy market, while encouraging measures to reduce dependence on Russian energy, the spokesman said.

The U.S. Treasury Department declined to comment and the White House National Security Council did not immediately respond to a request for comment.

U.S. sanctions reduce Russia’s ability, which typically produces about 1 in every 10 barrels of global oil, to get crude oil to market. The Paris -based International Energy Agency has estimated that restrictions and refusal of buyers could remove 3 million barrels a day from Russia’s global market of crude oil and refined products starting in April.

The source said Washington has no problem if India settles trade with Russia in rupees or continues to pay in dollars, provided the transaction complies with restrictions and with authorized entities.

India is devising mechanisms to settle trade with Russia, including through payments in rupee.

“Whatever they pay, whatever they do, have to comply with restrictions. Otherwise they expose themselves to huge risks”, the source said.

“As long as they comply with the restrictions and don’t increase purchases significantly, we’re okay,” the source said.

Russia faces an onslaught of international sanctions led by Western countries aimed at isolating it from the global economy, including shutting it down from the global bank’s SWIFT messaging system and blocking dealings by its central bank.

The White House has imposed sanctions on Russian entities and individuals among other things, crippling Moscow’s economy.

The Biden administration has also banned U.S. imports of Russian energy, including oil. But it has so far not targeted Russia’s oil and gas exports to other countries, as the administration weighs the impact on the global oil market and U.S. motor fuel prices.

New Delhi has called for an immediate ceasefire in Ukraine but refused to explicitly condemn Moscow’s actions. It has refrained from voting on several UN resolutions on war.

US President Joe Biden said this month India was “somewhat shaky” in acting against Russia.

The US official said India should use a mechanism created by the United States that excludes energy transactions, and import oil from ‘authorized entities’.

“We, in the next few days and weeks, will increase the enforcement of restrictions. We are telling everyone, everywhere around the world to make sure you comply with these restrictions is a message to everyone”.

U.S. sanctions have granted a waiver until June 24 to complete energy trade with the Russian Central Bank.

(This story has not been edited by NDTV staff and is automatically generated from a syndicated feed.)


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