How much delicious sanctioned Russian crude can India sell to the Satanic West?

We report you decide

Russia-India trade in billions (USD). Green: exports, red: imports. source: fontanka.ru

A recurring theme here at Eddie Slavsquat is how the proles scream and yell at each other, and sometimes even kill and maim each other in state-sponsored UFC deathmatches (“wars”), while the space lizards frolic in their fields of delicious fiat as they laugh and laugh and laugh.

For example: Have you heard of the Russia-India-Satanic West resource pipeline? Russia sells India discounted crude, which is subsequently exported to the Satanic West in the form of various petroleum products, which are the target of 10 trillion Satanic West sanctions as part of a war of annihilation against Moscow. So it goes.

We wrote about this friendly business arrangement almost a year ago. Has anything changed since then? No, not really. (Bloomberg recently claimed that Satanic West Sanctions have made India more nervous about slurping up rivers of sanctioned Russian oil that it then sells to the Satanic West.)

The current state of Russia-India trade raises questions about whether BRICS is actually fighting an economic shadow war against the Collective West, or if that’s just doggy doo-doo that Zerohedge uses to boost ad revenue.

There are other takeaways from Russia-India trade that are rarely discussed by Very Serious Internet People. At the end of January, the Russian International Affairs Council—which is a think tank operated by the Russian government—listed “the trade imbalance caused by the excess amount of rupees accumulated by Moscow” as one of the main obstacles to trade between Russia and India. As it turns out, “de-dollarization” doesn’t work very well if you trade goods for a non-convertible currency that you have little use for.

All of these Issues were touched upon in an article published at the end of February by Russian outlet Fontanka. So instead of typing up my own blog post, I will share a rough translation of Fontanka’s article with you.

The article does a decent job of explaining Russia-India trade without resorting to mystifying economic gobbledygook. It also provides a concise summary of how Russia’s Very Bad Sanctioned Oil somehow ends up in the West, with India acting as middle-BRICS-man.

Although Fontanka is clearly critical of the massive trade imbalance, and also points to how weird it is that delicious sanctioned Russian crude somehow finds its way to Russia’s Arch Nemeses, the paper correctly notes that there’s great potential and room for growth re: Russia’s trade with India. I fully agree and obviously I am not opposed to nations engaging in mutually beneficial trade. I’m just not sure if that’s how you can describe the current state of affairs. Debatable, at least.

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What do we exchange our oil for in India?

February 25, 2024. Fontanka.ru

India was not a particularly noticeable economic partner for Russia, but new realities have made it one of the leaders in attracting foreign currency. At the same time, a colossal trade imbalance has emerged: Russia gives India goods worth $60 billion, while India gives Russia only 4 billion.

What is Russia selling India?

Over three years, the volume of supplies of Russian goods to India has increased 10 times. Already in 2019–2020, the main export items were: oil, coal, diamonds, paper and fertilizers. Russian sunflower oil has always done well. In total, about 6 billion dollars. The caravans also did not go back empty: medicines, simple equipment and telephones, tea, shrimp and some other household items—about $2-2.5 billion.

The cataclysms of 2022–2023 had a huge effect on Indian-Russian mutual trade. Tens of millions of tons of Russian oil went to ports with names exotic to the Russian ear such as Mundra, Kandla, and Maharashtra.

Total crude oil exports from Russia to India in 2023, according to Indian customs data, amounted to 62.2 million tons and another 5.6 million tons of petroleum products. The average annual price is surprising. With the customs value of these 62.2 million tons being $44.99 billion, that comes out to $99.1 per barrel, assuming that there are 7.3 barrels in a ton of Russian oil. This, of course, is very expensive, especially considering that in many countries Russian oil comes at a large discount, and the UAE bought it from Russia for an average of $75 per barrel all last year.

The situation comes into line with reality a little more when we look at the monthly figures. For example, in December, the average price of 6.9 million tons shipped to India was already only $78 per barrel. Be that as it may, according to the documents, it turns out that selling oil to India was very profitable both for our exporters and for the budget. After all, taxes are paid on the price indicated in the documents.

What the Indians are doing with our oil is generally clear. No re-export is visible in customs statistics, but this is not required. The main loading ports of India are home to powerful oil refineries. And their work is visible to the naked eye. If in 2021 the Indians exported 48 million tons of naphtha, gasoline, diesel and jet fuel, then in 2023 the volume reached 104 million tons. The largest buyer is the Netherlands. It is the main European distribution center. The volume of supplies from India there grew over the past year from 9.4 to 18 million tons, at an average of $111/barrel. 7.2 million tons of oil refined in India ( +42% ) went to the United States, the average price was $120/barrel. Great Britain and Italy doubled their purchases. In Portugal the increase is four times, in Romania—seven times. In short, there is demand.

With the exception of oil and petroleum products, which last year accounted for 81.3% of Russia’s export revenue, among the largest items only sunflower oil showed significant growth: +31% in dollars. Both coal and phosphate fertilizers show a minus. Diamond supplies to India are in monetary terms at last year’s level. Russian soybean oil ($178 million, up 78%) and rolled steel ($127 million, up 360%) are successfully winning their place under the hot Indian sun. Gas supplies have doubled ($121 million), but it is not yet possible to transport much of it by sea.

Among the pleasant little things are peas. Last year, Russian farmers managed to earn $34 million from India—before that, supplies were practically zero.

Among the unfortunate losses is the complete loss of the Indian market for polyamide compounds, which are used in the production of stamped plastic parts. Compared to last year’s 41 million dollars, in 2023 Russia sold India polyamide compounds worth $6 million. Russian producers of synthetic rubbers suffered even greater losses. A year ago—$90 million dollars. In 2023—only $8 million.

What India is selling Russia

Studying Indian exports to Russia is much more exciting. There are completely unexpected things that are not usually associated with supplies from India.

The fact that Russia is hooked on Indian pills has been known for a long time. But each year there are fewer and fewer medicines from India. In 2011 we received pharmaceutical products worth $512 million from there—but in 2022, it was $371 million. The decline in supplies occurs in many groups of drugs: non-steroidal anti-inflammatory drugs (immediately -60% ), oncology ( -46% ), antihistamines ( -15% ), antihypertensives ( -31% ). Of the major pharmaceutical brands, shipments of Indian ibuprofen declined the most ( -63% ).

A quick analysis fails to find a clear explanation for this phenomenon. Back in 2022, against the background of the curtailment of activity in Russia by Western pharmaceutical firms, the authorities expected an increase in the supply of domestic drugs. Most likely, this is one of the effects of the general principle of government procurement of drugs: in the event of competition between imported tablets and domestic analogues, officials choose Russian ones.

But Indian ferrous metals did well. In general, their supplies doubled over the past year (to $322 million), with some specific items in this category even demonstrating a six-fold increase (such as ferroalloy powder and granules). Of course, we are talking about small volumes of supplies (within tens of millions of dollars), but it is clear that these are unique products that we previously purchased in the West.

Various organic compounds also show a noticeable increase in supplies. In general, an increase of 14% ($323 million), but, for example, aniline derivatives, which are used both in pharmaceuticals and as fuel additives, immediately quadrupled ($52.5 million). Inorganics are also growing primarily due to aluminum oxide—three times at once, to $168 million. It is clear that with such volumes we are not talking about raw materials for aluminum smelters. Most likely, these are molds used to create fire-resistant surfaces and in abrasive production.

The supply of ceramic tiles has also doubled. Russians, who are accustomed to brands with Italian names, don’t know much about the Indian analogues. But apparently, they’ll have to get used to it. India sent Russia $110 million-worth of ceramics.

Indian smartphones were the breakthrough of the year. A year before India exported $6 million in smartphones, now—$97 million. Of course, compared to what China produces, this is simply miniscule. Last year, India, a population of 1.5 billion, produced 146 million of its own smartphones. For them it’s a trifle, but in Russia there would be more than enough phones for everyone.

Also very noticeable is the growth of another product group that is rarely associated with India. Equipment, including industrial equipment, takes first place among imports. Equipment was brought to Russia in 2023 for $576 million, an increase of 112%. But the largest subcategory of equipment was computer technology, which includes computers, laptops, tablets, and server equipment. Imports of this subcategory increased by 175% compared to the year before, reaching $86 million.

Slight bewilderment is caused by a two-fold increase in the supply of goods designated in statistics as frozen beef ($47 million). It is generally believed that Hindus do not do this with their cows. But everything is stable ( +13% ) with the supply of carob gum ($74.9 million). Why exactly do we need it in such quantities, we will have to look on the Internet, but off the top of our head—in the food industry as a thickener.

Oddly enough, tea from India comes to us in very small quantities (69.8 million dollars), and its supplies are falling ( -23% ). The same applies to instant coffee.

In general, the structure of commodity exchange between our countries is very diverse and has enormous growth potential. Just look at the banana expectations that have been talked about loudly against the backdrop of cooling relations with Ecuador. India is still the world's largest banana producer - all that remains is to solve logistics problems.

At the same time, transport experts note that it is logistics, and in a broad sense, including storage and primary processing capacities, that is India’s main Achilles heel as an exporter. Its second problem is domestic consumption of products and raw materials; there is simply not much left for export. And the fact that, despite the huge volumes of rupees that have already been accumulated, Russia still fails to increase imports from India, at least approximately corresponding to the growth of exports, is very symptomatic.

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