The current low price of Russian oil is a huge economic advantage for Asian countries amid soaring world energy prices.
Indonesia considers buying Russian oil
In an interview with the Financial Times on whether Indonesia would buy oil from Russia, President Joko Widodo said: “We always consider all options. Of course if there is such a country and they offer it. better price”.
“The government has a duty to find different sources to meet the energy needs of the people. We want to find a solution,” added President Widodo.
In early September, Mr Widodo raised the price of subsidized fuel by 30 per cent, insisting the price increase was “a last resort” because of financial pressures. The move sparked protests across Indonesia, according to Reuters news agency.
Mr. Widodo’s comments also show the difficulty many countries face as they deal with the energy crisis that is affecting households and businesses around the globe.
President Joko Widodo said he had no choice but to raise the price of subsidized fuel by about 30 percent and the price of oil by about 32 percent from a year ago.
According to Reuters, any move to buy Russian crude at a price above the limit agreed by the G7 countries could expose Indonesia to US sanctions.
In August, Tourism Minister Sandiaga Uno said Indonesia had been offered Russian crude oil at a 30% discount. Accordingly, the country’s state-owned oil company, Pertamina, said it was considering the risks of buying Russian oil.
According to Indonesian trade unions, rising fuel prices will reduce purchasing power, at a time when wages are constrained and inflation is soaring.
In the face of soaring fuel prices, protests led by students and unions took place around the capital Jakarta and major Indonesian cities such as Surabaya, Makassar, Kendari, Aceh and Yogyakarta.
Russia is ready to sell oil at an even lower price than before to India
The discounts Russia has offered to India are expected to be substantial and lower than those offered by Iraq in recent months, Business Standard reports.
In an effort to reverse the G7’s plan to impose a price ceiling on Russian oil, Moscow announced its readiness to supply New Delhi with even lower prices than before.
According to New Delhi officials, the “significant discount” will be higher than the discount offered by Iraq in the past two months.
In May, the price of Russian crude oil sold to India was $16/barrel cheaper than New Delhi’s average import price of $110/barrel. The discount dropped to $14/bbl in June, when the average Indian import price was $116/bbl. As of August, the price of Russian crude oil is $6 below the average price.
India’s biggest oil supplier, Iraq, has also slashed prices since late June, providing a range of crude that average $9 a barrel less than Russian oil. As a result, the extremely price-sensitive market has shifted back in Iraq’s favor.
As a result, Russia slipped to third place in the list of oil exporters to India, meeting 18.2% of the country’s oil needs. Saudi Arabia (20.8%) and Iraq (20.6%) are the top two suppliers.
Even without a price debate, officials say a steady supply of crude should be established outside of West Asia. An official said: “Although oil imports from Iraq remain the main source of purchase, given the complex global situation and the volatile internal situation of Iraq, India needs to create alternative mechanisms.” .
China and India increased their purchases of Russian oil as prices fell due to Western sanctions. The US and Europe have called on China and India to limit their purchases of oil and coal from Russia, but the current low prices are a huge economic advantage amid soaring world energy prices.