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Crude oil

In the last few years, India is buying oil from Russia at cheap prices. It was believed that India is saving billions of dollars with this decision. But according to a research report by Brokerage firm CLSA, India has an annual net profit from Russian oil to only $ 2.5 billion, which is just 0.06% of India's GDP.

In the report released on Thursday, CLSA said that the benefits of India from Russia's imports have been exaggerated in the media. It is being told earlier that India is saving from this deal ranging from 10 to 25 billion dollars annually.

Start of oil purchase from Russia

The Russian-Ukraine war began in February 2022 after which strict economic sanctions were imposed on Russia by Western countries. Due to these sanctions, Russia started giving huge discounts on its crude oil so that it could create a new buyer and India emerged as the biggest buyer. In FY2024-25, India imported 36% of the total oil imports i.e. about 18 lakh barrels from Russia per day while the figure was less than 1% before the war.

How beneficial exemption on taking oil from Russia?

The CLSA report states that the exemption that appears is not as beneficial, even though the price of Russian oil is low to $ 60 per barrel, India actually benefit very little due to many expenses like insurance, shipping, and risk premium. According to CLSA, the average discount in 2023-24 was around $ 8.5 per barrel, which has now come down to 3 to 5 dollars. In recent months, this discount has reached only $ 1.5 per barrel.

CLSA said in its report that if India stops purchasing Russian oil, it will affect global oil supply. With this, crude oil prices can go from 90 to 100 dollars per barrel.