The View: Britain 'ran roughshod' over India and should apologise
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Since the Russian invasion of Ukraine, Western countries have hit Vladimir Putin with a series of crippling sanctions, affecting nearly every aspect of the Russian economy. To avert the worst blows from these sanctions, particularly on energy, Russia has turned towards the East, mainly India and China.
India is poised to purchase 15 million barrels of oil from Russia by the end of the year, according to experts.
Now, Russian state-backed oil giant Gazprom has also asked India’s largest gas transmitter GAIL to pay for gas imports in euros instead of dollars, according to sources.
This comes as Russia looks to end its reliance on US currency as western powers froze Russian assets overseas as a response to the invasion of Ukraine.
GAIL has previously been settling trading with Gazprom Marketing & Trading Singapore in dollars, as the two companies are currently in a long-term gas import deal with to annually buy 2.5 million tonnes of liquefied natural gas
GAIL, which imports and distributes gas, also is also responsible for operating India’s largest gas pipeline network.
The Russian gas behemoth last week asked GAIL to settle payments for gas purchases in euros instead of dollars
The sources familiar with the matter added that the state-run Indian firm is still considering the proposal.
A source told Reuters: “GAIL doesn’t see any problem in settling payment in euros as European countries are paying for their imports in euros.”
This deal between Gazprom and GAIL is not likely to be affected by western sanctions as GAIL is trading with the Singapore arm of the Russian corporation.
This move highlights Putin’s efforts to wean itself off the Petrodollar, which is a term for US dollars that are paid during energy transactions.
Companies tend to buy oil in dollars as it is the most widely used currency in the world, making it easiest to trade.
Countries around the world using dollars for trade boosts US assets, as these dollars are often reinvested back into US firms.
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Last week it was reported that Indian Prime Minister Narendra Modi and Putin are deepening their energy ties, as New Delhi evades Western sanctions on Moscow to import oil at discounted prices.
Price details were not immediately available, however sources told Reuters that the barrels of Russian Urals crude were purchased at a discount of $20-$25 a barrel, which is about £17 pounds.
At the moment, crude oil brent costs $120.60 (£92) per barrel.
According to the head of the operational department of the Russian trade mission in India Evgeny Ostapkevich, Russia is only likely to increase the volume of oil that it supplies to India.
India’s central bank is also in consultations on a potential rupee-ruble trade arrangement with Russia that would enable New Delhi to continue exports to Moscow despite western sanctions limiting international payment mechanisms.
The move also comes as many have slammed Mr Biden for his “alarming” comments on Putin in Poland on Saturday.
The US president called for a regime change in Russia, before brandishing Putin a “butcher and insisting the Russian premier “cannot remain in power”.
The president’s comments put his relationship with Western allies under strain while fuelling the Kremlin’s claim that Russia is faced with an “existential” threat.
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