Oil trade dynamics between two of the world’s major players, Russia and India, are undergoing significant shifts. The 2022-23 period saw India’s trade deficit with Russia soaring to an eye-watering $43 billion, illustrating the deepening economic ties and dependencies between the two nations.
In an interesting move, Moscow has announced that two of its leading banks, VTB and Sberbank, would play pivotal roles in facilitating trade payments with India. This is a testament to the evolving mechanisms of trade in response to global economic and geopolitical factors.
A staggering indication of this transformation is the growth of Russian oil supplies to India. In just the first five months of 2023, there was an 11-fold increase, underscoring India’s increasing reliance on Russian oil.
However, despite these shifts, India remains anchored to traditional payment methods. The bulk of its payments for Russian oil imports continue to be transacted in dollars. This showcases the persistent influence and dominance of the dollar in international trade, even amidst changing global alliances and trade practices.
As the tides of geopolitics and economics ebb and flow, the Russo-Indian oil trade presents a microcosm of the larger global picture, rich with lessons and insights for the discerning observer.