One of the most tantalizing questions that hover over India's petroleum industry is this: how long will it continue to enjoy access to cheap Russian crude oil?

Before the outbreak of the Ukraine crisis, Russian crude rarely entered the Indian market due to the high transportation cost. Its share in India's total crude oil imports was just 2 per cent in 2021. The Ukraine war drastically altered the situation. The sanctions against Russian crude by the US-led Western nations created a situation where Russia was forced to offer heavy discounts on its crude in order to earn money and avert a critical economic crisis precipitated by the blockade.

The crude-starved Indian refineries grabbed the Russian overture. As a result, the share of Russian crude in India's monthly imports at one stage soared to as high as 40 per cent. Russia emerged as India's top oil supplier in 2023. The cheap crude from Russia helped shrink India's crude oil import bill by 15.9 per cent to $132.4 billion in FY 2023-24, down from $157.5 billion in the previous year, even as import volumes remained the same.

Of late, India's imports of Russian crude oil have started to decline. In January 2024, India's imports from Russia fell 4.2% to 1.3 million barrels per day (bpd), compared with 1.4 million bpd in December and 1.62 million barrels in November 2023. Imports from Russia soared to an all-time high of 2.1 million bpd in June last year, accounting for almost 40 per cent of all oil India imported. Russia, however, continues to remain India's top oil supplier, accounting for a little less than a quarter of the imports of 4.91 million barrels a day.

That brings us back to the enigma that envelops the sustained flow of Russian crude to India. Is there a possibility that Russian crude will disappear from the Indian market once the war in Ukraine ends? This looks inevitable since the discount on Russian crude will almost certainly disappear. Without the discount, Indian refiners will no longer find it attractive to eye this source of crude oil.

The Americans will be mighty pleased if the torrent of Russian crude to India turns into a mere dribble. The US was never happy to see India buy cheap Russian crude but did not articulate their displeasure beyond a few murmurs.

It is in the interest of India to tap Russia for its crude and LNG requirements. However, the vast geographical distance between the two countries and the consequent high freight rates deter the possibility of exploiting the full potential of the opportunity that Russia affords.

The biggest problem appears to be the perceived resistance from the US to the notion of India's growing dependence on Russia to meet its energy needs. The US has emerged as the world's largest crude oil producer and it could have become a dependable source for India. The problem here is that American crude is "sweet" - which means it contains very little amounts of sulphur. Indian refineries rely on sour crudes and the sweet variety has only limited relevance for the Indian market. Even so, why should India go all the way to Russia when the same quality crude is available in the nearby Gulf countries? The discounts on Russian crude have clearly tilted the balance but it isn't certain that these price cutbacks will continue to prevail.

The Modi government has very good relations with the Biden Administration in the US. Both are committed to the security objective of resisting China's expansionist policies in the Indo-Pacific region and are members of the four-member Quad which is an informal strategic group created for this purpose. But the very same US Administration knows that China is the biggest beneficiary of Russian crude oil. The US is unable to do anything against that. China gets nearly 800,000 barrels per day via a pipeline from Russia in addition to imports by sea.

China's state-owned oil enterprises are increasingly using the Chinese renminbi, rather than the dollar, to finance oil purchases. China imports most of its gas via a pipeline from Central Asia - Turkmenistan is currently the largest supplier. But a new pipeline, known as Power of Siberia, is due to be completed later this decade, and it could turn Russia into China's biggest supplier of gas.

President Putin knows that India is a dependable market for Russia which can consume a significant portion of Russia' gas and oil. The US and EU may have their own reasons to invoke sanctions against Russia. But President Putin is fed up with the Western threats of more economic sanctions - and he is ready to run the gauntlet after years of eyeball-to-eyeball confrontation. The West has been chipping away at Russia's dominance over Eastern Europe and has been assiduously wooing the satellite nations to come under the umbrella of Nato's protective influence.

The Russian President knows that a customer like India cannot afford Russian crude unless it can offer an attractive price. The swapping mechanism can be used to reduce transportation costs. But before that Russia should agree to make its crude cheaper for India, a special deal which calls for a political will on the part of that country. India's leadership can take the initiative in broaching the idea. Nothing is difficult for an imaginative political leadership especially when it wrestles with the compulsions arising from the fact that India's crude import dependency is poised to swell to 90 per cent by 2030.