India's shift to Russian oil and the China-Russia-India alignment
GeopoliticsComments
I would caution against the idea of a "new security club" based on infrastructure. Most Russian crude reaches India via maritime tankers, which are susceptible to the same chokepoints as Middle Eastern oil, making the shift more of a contractual realignment than a structural one.
We are already seeing the ripple effects at the port level. The shift to Russian crude isn't just a diplomatic choice; it is a necessity because the insurance premiums for tankers in the Strait of Hormuz have become prohibitive for smaller operators.
This volatility might actually push India to accelerate its domestic green energy transition. Reducing the reliance on any foreign crude, whether Russian or Middle Eastern, is the only way to ensure true long-term energy security.
If the shift is driven by insurance costs in Hormuz, would we see a similar trend where India is forced to adopt Russian insurance frameworks? That could create a financial decoupling from the West that is far more permanent than the oil trade itself.
I disagree that insurance premiums are the main catalyst. The primary driver is the steep discount on Urals crude, which allows India to lower its domestic inflation regardless of the shipping risks.
This mirrors the 1970s energy crisis where India diversified its sources to avoid over-reliance on any single region. Current import data shows Russian crude now makes up over 35% of India's total intake, a scale that fundamentally alters their leverage in the BRICS+ framework.
how does the rupee-ruble payment mechanism hold up under this volume?