Recently, the European Union applied sanctions on the importation of Russian oil to reduce its dependence on Russia as a source of energy. The EU sanctions combined with those applied by the United States have caused Russia to deeply discount its oil prices. The discounts have provided an opportunity for China and India to increase the volume of oil imported from Russia.
On June 15, the price of U.S. West Texas crude oil rose from $93/barrel before the outbreak of the Russia-Ukraine war to $115/barrel, while the price of European Brent crude oil rose from $93/barrel to $120/barrel.
On the same day, due to the EU and U.S. sanctions, the price of Russian Urals was $34/barrel lower than the price of Brent crude. This provided an opportunity for India, which is facing high inflationary pressures, to buy the lower-priced crude oil….