BRICS members India and Russia initiated crude oil deals worth billions of dollars between February 2022 to December 2023. India saved nearly $7 billion in two years by procuring oil in local currencies with Russia due to the sanctions. The U.S. had sanctioned Russia for invading Ukraine allowing only a part of trade to be settled in the dollar.
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The Modi-led government made use of the sanctions and purchased oil at discounted prices with its BRICS counterpart Russia. However, Russia demanded India settle oil payments in the Chinese Yuan only and not the Indian Rupee. The demand did not go down well with India, as the country remains at loggerheads with China.
India is worried that extensive usage of the Chinese Yuan will only solidify the Communist country’s GDP and economy. The next best option is to procure oil normally like they used to with the Middle East and the U.S. Therefore, India now took a U-turn and is buying more oil from the U.S. than its BRICS counterpart Russia, reported Bloomberg.
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BRICS: India Buys More U.S. Oil, Sidelines Russia & Chinese Yuan
BRICS country India is purchasing more oil from the U.S. and not Russia due to energy flows dwindling amid sanctions. State-owned oil refiners like Indian Oil, Bharat Petroleum, and private refiner Reliance Industries purchased 7 million barrels of oil from the U.S. in March 2024 alone.
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The West Texas Intermediate Midland (WTI) crude oil accounted for the bulk of India’s purchase this month in March. The WTI oil is expected to be heavily used in India in the coming months. India is ditching its BRICS members Russia and China as the country is gearing up for the Prime Ministerial elections in May this year.
Purchasing oil from Russia using the Chinese Yuan is not the right option to campaign for elections. India’s switch to U.S. oil in recent days will hit Russia’s Sokol oil the most. Therefore, cracks could emerge between the BRICS countries due to the latest developments in oil procurements.