A delicate balancing act

The on-going conflict in Ukraine has sent shockwaves through global energy markets, impacting everything from international relations to commodity prices.

- SANTHOSH MATHEW

While the war has led to immense suffering and a humanitarian crisis, it has also created unexpected economic opportunities for countries like India.

The remarkable surge in India's fuel exports to the European Union (EU) exemplifies how geopolitical tensions can yield economic gains for nations that skillfully navigate the shifting landscape.

In the first three quarters of 2024, India's exports of fuels such as diesel to the EU soared by an impressive 58 per cent compared to the same period the previous year. Much of this increase can be traced to Indian refineries acquiring Russian crude oil at discounted prices, a direct consequence of the sanctions imposed by Western countries on Russia.

As European nations increasingly turned away from Russian oil, India capitalized on the opportunity, positioning itself as the largest exporter of oil products to the EU.

Before the invasion, Europe imported approximately 154,000 barrels per day (bpd) of diesel and jet fuel from India. Since the onset of the war, that figure has nearly doubled; highlighting India's newly gained prominence in the global oil market.

Refineries in Jamnagar, Vadinar and New Mangalore have ramped up their operations, relying heavily on Russian crude to meet this surging demand.

This strategic maneuver has allowed India not only to enhance its foreign exchange reserves but also to play a pivotal role in the global oil supply chain during a time of crisis.