According to Livemint, Russia has offered to help India lease and build large-capacity ships in a move that could see Indian exporters reduce their costly reliance on foreign shipping lines. The Russian offer follows India’s refusal to join the Russian oil price cap imposed on December 5 by the G7 countries and their allies.
“Deputy Prime Minister (Alexander Novak) welcomed India’s decision not to support the Russian oil price cap, which was imposed on December 5 by the G7 countries and their allies,” the Foreign Ministry said. of Russia in a statement.
To be sure, the Federation of Indian Export Organizations has been lobbying the government to establish a world-renowned Indian shipping line, saying that Indian exporters have been heavily reliant on foreign shipping lines. India repatriated more than $80 billion worth of transportation services in calendar year 2021, he said.
The Mint previously reported that the government is working on a production-linked incentive scheme for manufacturing shipping-grade containers. Divestment-tied Shipping Corporation of India Ltd, once India’s largest shipping company, reported a 48.81% decline in net profit to ₹124 cr in the quarter ending September.
“Simultaneous restrictions on G7 insurance and financing, a delayed launch of the price cap, and Russia’s aversion to selling on Western policy restrictions will combine to create an initial shortage of ships and buyers needed to roughly divert the half of the 2 million b/d,” S&P Global’s chief geopolitical risk adviser said in a note.
Russia’s seaborne crude exports were barely changed in November to just over 3 million barrels per day (b/d) after flows to India surged to a record high, absorbing barrels displaced from Europe, where imports fell to record lows before the European Union. December 5 import ban and G7 price cap, S&P Global Commodity Insights said.
“While Russian crude flows to the EU plunged 308,000 b/d to average a record low of 464,000 b/d for the month, Indian refiners increased their purchases of Russian oil by 272,000 b/d to a record 1 .17 million b/d. S&P said.
To avoid reliance on the ban on insurance services and tanker chartering in the European Union and the United Kingdom, Novak offered India’s cooperation in leasing and building large-capacity ships, according to the Russian statement.
The executive body of the European Union has called on its 27 member countries to limit the price of Russian oil to $60 a barrel as part of the West’s attempt to squeeze Moscow’s oil revenues and limit its ability to wage war in Ukraine by maintaining global prices and constant supplies. As of December 5, Western shipping and insurance companies are prohibited from handling Russian oil sold above the ceiling price.
In a meeting, India and Russia highlighted the record growth in bilateral trade and expressed the desire to continue this interaction, increasing cooperation in the trade of energy resources, such as oil, petroleum products, liquefied natural gas, coal and fertilizers. Between April and September, India’s exports to Russia stood at $1.29 billion, up from $3.25 billion last year.
Imports from Russia, however, have increased fivefold in the first five months of the fiscal year to $17.23 billion. Russia held on for the second straight month as India’s top oil supplier in November, according to energy load tracker Vortexa.
Source: Hellenic Shipping News & Livemint