Are India’s full-price exports of fuel to the European Union that it refines from crude oil imported from Russia at discounted rates due to the EU’s $60-a-barrel price cap on Russian oil, constitute a circumvention of the sanctions targeting Russia?
In an interview with the Financial Times, the European Union’s high representative for foreign policy Josep Borrell said: “If diesel or gasoline is entering Europe . . . coming from India and being produced with Russian oil, that is certainly a circumvention of sanctions and member states have to take measures.”
Shortly after that, Indian Foreign Minister Subrahmanyam Jaishankar, who was in Brussels during the last leg of his three-nation tour, strongly denied that India was violating any sanctions imposed on Russia and said the oil in question could not be treated as Russian oil if it is refined in another country before being exported, according to the rules the EU has set out for its sanctions.
Statistic shows that India’s imports of Russian oil increased 10-fold last year, compared with the previous year, and the EU’s price cap shaved about $5 billion off the cost.
Even though, as the EU side said, that forms a reliable though indirect source of oil trade revenue for Moscow in effect.
If the EU wants to plug what it calls the loopholes, it has no choice but intensify its sanctions so as to block products with Russian origins even if they are made in other countries. But given Russia’s large share in the world’s raw industrial material market, that move would prove unrealistic.
For instance, whether the EU will say no to agricultural produces exports from countries that consume large amounts of Russian chemical fertilizers, or whether it will crack down on any other countries, particularly the least developed ones, for importing such food?
Borrell and the other politicians in Brussels should know that the moment the EU chose to blindly follow Washington on the Ukraine conflict, including by weaponizing sanctions, it was putting itself in an awkward situation, if not under control of the US.
As for the sanctions, none of the moves the EU is taking to further intensify them will leave itself, as well as the world industry and supply chains, unscathed.
True, the way India is exploiting the price gap in the energy trade is aggravating to Brussels. But that would be instantly dwarfed if it was compared with the extent to which the US is taking advantage of the bloc.
As Brussels still pins hope on New Delhi mediating with Moscow for an early cease-fire, no wonder the oil dispute was not a topic for the meeting between the two on Tuesday.