In a surprising turn, the USA has been inviting India, as a “friend,” to provide help with stabilizing global oil prices. U.S. Energy Secretary Chris Wright confirmed Washington has requested New Delhi to buy stored Russian oil and refine it locally. The hope is that India’s massive refining capacity could alleviate pressure among refineries around the world and lower higher world costs of energy.
India is one of the world’s largest importers of crude oil with a burgeoning refining industry. Its refineries handle many grades of crude, including Russian oil, that many Western countries have scaled back buying because of sanctions. By funneling Russian crude toward Indian refineries, the U.S. expects India to become a balancing factor in the global energy market.
There is pressure on the U.S. government to limit fuel prices, which have a direct impact on inflation and spending. By getting India to buy Russian oil, Washington hopes to:
- Reduce pressure by refineries in Europe and the United States.
- Maintain an ongoing flow of refined products such as diesel and petrol.
- Prevent spikes in global oil prices.
This also illustrates how much geopolitics and economics are intertwined. Though having sanctioned Russia, the U.S. is now indirectly aiding India’s purchase of Russian oil for the sake of the world market price stability.
Since 2022, India has been purchasing discounted Russian oil, refining it and exporting products to overseas markets. That has helped India save billions of dollars and strengthen its energy security. Extending this role even further, India could become a major stabilizer in the global oil market.
The benefits of India accepting Washington's request could include:
- Lower fuel prices worldwide.
- Reduced inflationary pressure in many economies.
- Stronger energy cooperation between India and the U.S.
But critics could contend that this approach indirectly sustains Russia’s oil revenues, which are still a touchy issue in global politics.
Calling India a “friend” and demanding assistance from it points to India’s increasing significance in global energy. India, having been one of the few countries that could successfully refine large volumes of Russian oil, could have played a pivotal role in helping to tame volatile oil markets. It is going to matter whether this kind of collaboration will flourish - or fail - depending on how India weighs national interests against expectations from around the world.
