'No, India is not profiteering from Russian oil. Export is same': Energy expert counters Navarro

Energy analyst Anas Alhajji on Thursday challenged US allegations that India is profiteering from Russian crude, arguing that the country's petroleum exports remain largely unchanged since before the Ukraine war.

"It seems that there is more to the story than Russian imports," he said in an interview with CNBC on US President Donald Trump's 50% tariff on Indian imports over the purchase of Russian oil. "Because the EU imports a significant amount of natural gas and LNG from Russia. No one said anything. Turkey imports significant amount of oil from Russia, and Turkish exports of petroleum products to Europe are higher than that of India."

He compared India's treatment with that of other buyers. "United States imports from Russia in the first 5 months of this year went up by 23%. No one is saying anything about it. The US still imports uranium from Russia. No one is saying anything about it. Today, we have tankers arriving from Venezuela delivering oil to the United States despite the sanctions. So it seems that there is more to the story than just Russian oil."

White House trade adviser Peter Navarro had earlier accused India of running a "profiteering scheme" by using discounted Russian crude to sell refined products abroad. "Prior to Russia's invasion of Ukraine in February 2022, India virtually bought no Russian oil. It was almost one per cent of their need. The percentage has now gone up to 35%," Navarro said. "They get cheap Russian oil and make refined products which they sell at premium prices in Europe, Africa, and Asia. It is purely profiteering by the Indian refining industry."

However, Alhajji countered this view. "If you look at Navarro's arguments, for example, he is saying that the Indian refiners are making a lot of money by importing and exporting a significant amount (of oil). And this argument is false. And the reason why it is false because if you look at Indian petroleum export before the Russian invasion of Ukraine and now - it's virtually the same. So the idea that they are importing to export is not correct."

He described the situation as a rerouting of supply chains. "In fact, what we've seen since the Russian invasion is ...change in the direction of trade. That's it. India was exporting those petroleum products to Asia. And they diverted that to Europe because Europe or the EU sanctioned itself from importing Russian petroleum products. So India basically is compensating for that, while the Asian market is supplied by the new refineries in the Middle East in Kuwait, UAE, and Oman."

On the impact of tariffs, Alhajji stressed that President Trump's concern with oil prices might outweigh punitive measures. "We know that President Trump does not want high oil prices, and any restriction of Russian oil is going to increase prices significantly."

Responding to speculation that India may reduce imports to accommodate US concerns, he dismissed recent reports. "This morning there was a piece of news saying that Indian refiners are going to reduce their imports from Russia in October. This is absolutely not correct because if you look at every October in recent years, imports from Russia declined in October. So the decline basically is natural."

Asked about wider economic consequences, he warned that the real hit could come outside the oil sector. "I think the bigger issue is everything non-oil because the US is importing most of the stuff. They import from India. For example, 40% of generic drugs in the United States are imported from India. So other companies outside the oil sector are going to be hurt more than the oil sector."