Gulf countries have been arm-twisting us on the behest of their rich oil resources. However, it seems that days are just numbered, when India will shun these countries’ monopolistic behavior. Soaring oil imports from Russia and India’s effort to move toward clean energy have paved the way for India’s energy sufficiency.
Before March 2022, India imported about 85% of its oil requirement with the highest shares from Gulf countries. With 24% from Iraq, 18% from Saudi Arabia, and 11% from UAE, about 50% of oil came from these three countries. But, the recent geopolitical overhaul has changed this oil relationship once for all.
Russia dethrone Saudi Arabia
Reports suggest that Russia has finally dethroned Saudi Arabia as India’s second biggest oil partner. Following the Ukraine War, Europe imposed huge sanctions on Russia and cut oil imports. Taking the opportunity in hand, India started to take Russian oils at a much-discounted price.
According to Bloomberg, Russian crude was much cheaper than Saudi crude. In May, Russia was offering almost USD 19 a barrel discount on its crude as compared to Saudi. Although, in June the discount narrowed to USD 13 with an average price of USD 102 per barrel. But, the Russian rate remained cheaper than Saudi.
Considering the price variations, from the ninth largest in 2021, Russia became the second largest oil partner to India finally replacing Saudi Arabia.
Iraq remained the top oil supplier to India
In the overall oil competitive market, Iraq remained the top supplier to India. On one hand, where Saudi Arabia tried to capitalise on the Ukraine crisis to earn dollars, Iraq tried to increase its Indian shares by decreasing prices.
In June, when Saudi Arabia supplied oil at a price of USD 115 per barrel, Russia supplied USD 102 per barrel. Competing with all, Iraq supplied with a much-discounted price of USD 93 per barrel.
The game of discounting helped Iraq to maintain the top oil supplier throne of India. Iraq constantly maintained its 25% average oil export to India. Whereas, Saudi Arabia and UAE constantly decreased their export shares. In April, when Saudi Arabia’s share in India’s imports was around 19%, it reached 12% in June. Similarly, UAE’s share in India’s imports was 15% in April, which decreased to 7% in June. In this oil battle, Iraq seems to be winning India’s ¼ oil import share with 26% in June.
End of Gulf dominance
The newly released numbers are nothing less than setback for the Arab world. The Arab world is infertile, to say the least. Only two percent of the area falling under the ambit of the Gulf Cooperation Council is arable. That is why the region is heavily dependent on oil and related petrodollars for revenue. In fact, it won’t be a far-fetched argument to assert that whatever modernity Arabians have, it is only on the back of oil revenues.
The downfall of the oil relationship with Saudi Arabia will finally end their decades of arm-twisting. On behalf of Pakistan, the Organisation of Islamic Cooperation has constantly tried to poke its nose into the internal affairs of India. Saudi Arabia has been an influential member of OIC and oil dependency on the country has largely affected India’s political maneuvering in international affairs. With the decrease in dependency on Saudi, India will finally see a new dawn in geopolitics.
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