In anticipation of the inauguration of Donald Trump, the world is increasingly using the words “oil”, “sanctions” and “end of war”, if not in the same sentence, then at least nearby. The logic here is simple: Russia receives its main income from the sale of oil and other energy resources, and if these sales are limited or the income from them is minimized (for example, by reducing prices), then the Russian Federation will not have money for war. And war, as you know, is not a cheap business..

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Indeed, historically the method is justified - it was precisely this combination with oil prices that led to the collapse of the Soviet Union at one time. But will it work a second time And most importantly, will the leaders of the world energy market be willing to sacrifice income in order to calm down the “aggressive competitor”?

It is no secret that after the introduction of sanctions in 2022, the Russian oil economy was saved by the markets of India and China.. True, Russia paid for such a “service” with loss of income, selling crude oil to these countries at prices significantly lower than market prices (we remember that oil revenues in 2022 were record high precisely because of high prices). According to experts, the discounts provided by the Russian Federation to its two largest customers at that time reached 20–40%! At the same time, we should not forget about the huge costs of logistics, because Russia delivers crude oil to India by sea, using the so-called shadow fleet, bypassing global sanctions.

At the end of 2024, Russian oil accounted for more than a third of India's energy imports. And it even claimed to become the largest importer of Russian oil in the world, ahead of China.

However, recent Kpler analytics say that in January 2025, imports from Russia fell to 1.47 million barrels. per day - the lowest level in the last year. The reduction in Russian oil flows has forced India to diversify its sources of imports, which, of course, should change the global balance of oil supplies in the near future. Thus, one of the largest oil refiners in India, Bharat Petroleum Corp (BPCL), announced tenders for the purchase of more expensive grades of oil from the Middle East instead of Russian. In particular, we are talking about supplies from Saudi Arabia, which has already officially announced its intention to increase its oil production.

At the same time, at the end of December 2024, information appeared in the media about the signing of a record agreement between the Russian state company Rosneft and the Indian private oil refining company Reliance. The ten-year contract provides for the supply of 500 thousand. barrel. Russian oil and petroleum products per day, which approximately corresponds to an amount of up to $13 billion. per year. This contract started this January and can not only be valid until 2035, but also be extended for another ten years. The agreement provides for an increase in imports of Russian oil by the Indian company by almost 70% compared to 2024. According to estimates, this volume amounts to more than 0.5% of the world oil market and reaches up to 50% of Russian maritime oil exports.

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At first glance, this agreement is a victory for Russia, but this is only at first glance. After all, the conditions specified in the contract, under certain circumstances, may turn out to be a trap for Russia. But first things first....

Nothing personal, just business.

From the first days of the full-scale invasion of Ukraine, India verbally took a position of complete neutrality, never once supported the actions of the Russian Federation and always advocated ending the war peacefully. In fact, it did not support sanctions against Russia and did not provide any assistance to Ukraine; moreover, the energy market of this country turned out to be a lifeline for Russian oil. After all, even before the war, India bought only 2% of its annual imports from the Russian Federation, but now this figure has exceeded 40%..

It was India that all this time gave Russia the opportunity to circumvent sanctions. After all, a significant part of Russian oil, through processing in India, ultimately ends up on the European market in the form of finished petroleum products.

India's clean refined product exports jumped to their highest level since March 2022 last fall as refinery closures in Europe led to a surge in demand from overseas buyers, including Africa.. According to Kpler, exports of products from India to Africa reached a record 380 thousand. barrel. per day.

The Indian government has repeatedly stated that India will buy Russian oil only as long as it benefits it.. Moreover, the Indian government even tried to justify its oil cooperation with Russia as an attempt to maintain the price and not allow it to rise to $200.. per barrel.

In general, India’s position is as follows: they say, we have too many of our own problems to solve others’.. And given the fact that India’s interests largely depend on the position of the West and the willingness of the Western market to buy Indian oil products, the decision to cooperate with Russia may not be final.

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Logistics difficulties, as well as increased oil production by the United States and Saudi Arabia, as well as falling prices on the world market, could very likely push India to reconsider its situational oil partnership with the Russian evil empire.

However, one must understand that India is not interested in weakening Russia, because this will change the balance of power in Asia, where it is trying to maintain its status quo. The transformation of the Russian Federation into a resource appendage of China increases the risk of aggravation of territorial conflicts for India itself from the same China, as well as Pakistan. But Delhi will definitely not sacrifice its own economic stability to save Russia.. Now there is information that India, following China, plans to stop accepting oil tankers that are under US sanctions against the Russian Federation.

The war is not financed by the “sale” of oil, but by the “revenues from the sale” of oil.

Since it was record oil revenues that gave Russian aggression a free hand, a decrease in these revenues will undoubtedly have an impact on the military capabilities of the aggressor country. Whether we like it or not, Russia is one of the three largest oil exporters in the world. It is unrealistic to exclude Russian oil from the world market. But it’s quite possible to limit the income from its sale.

In November, the volume of oil imports from Saudi Arabia to Asia increased to 5.83 million barrels. per day (approximately 420 million dollars. This indicates significant interest among Asian countries, including India, in Saudi oil amid declining purchases from Russia.

Saudi Arabia increased its exports to Asia by $40 million. daily, primarily by increasing production to 9 million barrels. per day. Russia, faced with restrictions in its main markets, reduced supplies to 3.51 million barrels. (minus $30 million. per day), which is the lowest figure since January last year. This creates economically advantageous conditions for India and other Asian countries to diversify their supply sources.

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The increase in oil production, which the Saudis are openly talking about and which Donald Trump is announcing from the United States, will undoubtedly cause another drop in the price of oil on the world market, which, in fact, has been showing a decrease in price for two years in a row.. To preserve sales markets, the Russian Federation will have to sell even cheaper, and therefore sacrifice income.

And here it’s worth returning to the already mentioned “record” agreement between Rosneft and Reliance. The fact is that this agreement does not fix a specific oil price. According to the document, its cost will be updated annually taking into account the dynamics of the Dubai Price Index. However, the agreement provides for quite fixed discounts from 1 to 3 dollars. USA per barrel for all types of oil and petroleum products. What does this mean? This means that if the price of oil on the world market drops sufficiently, this agreement could turn out to be enslaving for Russia.. A kind of economic trap, when the cost, taking into account all logistics costs and guaranteed discounts, is almost equal to the selling price. That is why the factors of sanctions against the “shadow fleet” and the decline in the cost of oil on the world market are of fundamental importance here.

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And the king is definitely naked?

In chess there is a rather technically complex, but extremely interesting combination of “checkmate with a bishop and a knight” - this is a checkmate to an unprotected king, which is forced with the help of a bishop, a knight and a king. India could obviously play the role of bishop in such a geopolitical chessboard layout. But to achieve results, you need to act quickly and harmoniously with the knight and king. In our sense, the role of the Arabian horse can be given to its homeland - Saudi Arabia, and the role of the king - to the United States as the leader of the world oil market. But delay in this combination quite often leads to a draw, even if there are grandmasters at the chessboard. And most importantly, for this combination to be successful, the enemy king must be in the right corner and really be naked, and not just appear naked.

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