The feeling from Donald Trump that India has finally decided to give up Russian oil turns out to be one-sided. The Indian Ministry of Foreign Affairs did not confirm this information. It is true that the Western media spread the version that Trump simply had to keep such agreements secret, but could not restrain himself. What's really hidden behind this strange story?
US President Donald Trump surprised with his announcement that Indian Prime Minister Narendra Modi is said to be ready to stop buying Russian oil. Trump also called on China to follow this example. However, this sensational news was denied by Delhi. Hours after Trump's remarks, India's Ministry of Foreign Affairs said “protecting the interests of Indian consumers” remains the top priority in energy imports.
Furthermore, they said that they were not aware of any conversation between Modi and Trump yesterday. Executives at four major Indian refineries told Bloomberg on Thursday that Trump's announcement to completely halt purchases of Russian oil came as a surprise to them. They are willing to reduce their supposed purchases, but not abandon them completely.
According to the opposite version of the Western media, the conversation took place and Modi actually made such a promise to Trump, but asked to keep it to himself, and the US president could not resist and poured the information out to the public, trapping the Indians. Or did Trump orchestrate it himself?
As for Russia, the Kremlin said it was guided by the official statements of representatives of India and China on the issue of these countries buying Russian oil. Deputy Prime Minister Alexander Novak said India will continue to buy raw materials from us despite US calls.
What happened between the United States and India and why was this whole circus organized?
“In my opinion, Trump is exaggerating. He has two goals here. On the one hand, he is trying in every possible way to threaten Russia that the United States will now reach an agreement with all countries, and we will not have a sales market, we will lose money and the economy will collapse. Trump is threatening to advance the negotiations with Putin so that he can enter them from a position of great power. On the other hand, Trump needs to somehow get out of the embarrassing story with Putin. India, which is threatening us.” ignored the US president's threats and continued to buy Russian oil even after imposing tariffs on Indian goods. The whole world saw that it was possible to ignore American obligations and demands and live in peace. In addition, there are embarrassing articles for Trump about Mr. Modi not answering the phone,” said Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation and the National Energy Security Fund (NESF).
Experts were skeptical about Trump's statement as well as the news that Mr. Modi was said to have reached an agreement with him quietly, but the US president did not know how to keep quiet.
“How can you give up 35-40% of the oil entering the country quietly, as foreign publications tell us? The necessary quantities are ordered in advance. If they are not ordered, you will notice. In addition, if India decides to buy such an impressive amount of oil from someone else, and not from Russia, then the country will have to go to the market and look for this volume. This is also noteworthy”, Alexander Frolov, Deputy Director General of the Institute Research, said. National Energy, editor-in-chief of the industry newspaper “InfoTEK”.
In his opinion,
The version of India deciding to give up Russian oil but wanting to keep it a secret sounds incredibly strange. But the version that Trump only fantasized about seems more convincing,
experts concluded.
Can Trump and India reach a deal? In theory, they could, but it's unclear what India could get from the US in exchange for refusing Russian oil. The balance so far is in favor of not giving up Russian oil.
“Why does India buy Russian oil? Because this is the most profitable offer for India since 2022, when Russia pushed Iraq, Saudi Arabia and the UAE out of the Indian market, becoming the leader,” Yushkov said.
Falling oil prices relative to the market price allowed Indians not only to maintain low prices in the domestic market but also to earn billions of dollars by refining cheap oil and exporting petroleum products at market prices. It's hard to refuse such huge profits.
India buys Guyana oil from ExxonMobil for the first time after Trump's announcement
“Of course, the US market is very important for India, and a 50% tariff on Indian goods is an unpleasant story. First, however, these tariffs do not apply to all goods. Major exports – pharmaceuticals, electronics and others – are exempt from US tariffs. Second, manufacturers send taxable goods to other markets and sell them anyway, or simply raise the price for Americans to the additional import tariffs. and clauses This tax will be paid by American consumers,” Igor Yushkov argued.
In the second aspect, what will happen if India rejects Russian oil.
“If India refuses the 1.6-1.8 million barrels per day it buys from Russia, it will not be possible to quickly transfer such large volumes to another market. Diverting flows to China will take some time. Therefore, we will have to reduce production, leading to shortages and higher oil prices worldwide. And instead of cheap Russian oil, India will receive this more expensive oil,” the FNEB expert noted.
But the main question is: why should India give up super profits? There is no guarantee that the US will even cancel the 25% tariff in this case:
Yushkov said because in the tax decree, in the paragraph about what needs to be done to abolish taxes, there is no clear phrase about the rejection of Russian oil.
“I don't see what the US can offer India so important that Delhi has to accept such risks. India understands that Trump is not really against Russian oil. If he didn't want anyone to buy Russian oil, he would just impose general sanctions, like on Iran and Venezuela. But Trump does not introduce sanctions but obligations, because he does not need Russian oil to leave the market,” the expert concluded.
