India Sends Diesel to China for the First Time Since 2021 Amid US Tariffs and EU Sanctions: Report
In a rare move, India has sent a shipment of diesel to China for the first time since 2021. This development comes amidst the ongoing trade tensions between the United States and India, as well as European Union sanctions on Indian refiner Nayara Energy. The cargo, which consists of about five lakh barrels of diesel, is being transported from Nayara Energy’s refinery in Vadinar, Gujarat, to China’s Zhoushan port.
According to a report by Bloomberg, the diesel shipment was initially bound for Malaysia but made a U-turn towards China due to the changing market dynamics. This move is seen as a significant shift in India’s energy trade policy, particularly in the context of the ongoing trade tensions with the US and EU.
The US had imposed 50% tariffs on Indian exports in June, citing concerns over India’s tariffs on certain American goods. This move was seen as a retaliatory measure by the US, which had imposed tariffs on Indian steel and aluminum products earlier. The EU, on the other hand, has imposed sanctions on Nayara Energy, citing concerns over the company’s alleged links to Russian oil major Rosneft.
Nayara Energy, which is controlled by the Russian-linked Trafigura Group, has been facing increasing pressure from the US and EU over its ties to Rosneft. The company has been accused of being a vital link between Rosneft and the Indian market, despite the Russian oil major’s sanctions imposed by the US and EU.
The diesel shipment from Nayara Energy’s refinery in Vadinar, Gujarat, is seen as a significant development in India’s energy trade policy. India is one of the largest consumers of diesel in the world, and the country’s refineries produce over 3 million barrels of diesel per day. However, with the increasing demand for diesel in India, the country has been looking to increase its exports to other countries.
The shipment of diesel to China is seen as a strategic move by Nayara Energy to diversify its market and reduce its dependence on the US and EU. The move is also seen as a sign of India’s willingness to engage in trade with China, despite the ongoing tensions between the two countries over issues such as the border dispute and trade tariffs.
However, the shipment of diesel to China may also be seen as a challenge to India’s efforts to reduce its dependence on imported oil. India has been trying to reduce its reliance on imported oil by increasing its domestic production and increasing the use of alternative energy sources. The country has set a target of reducing its dependence on imported oil to 30% by 2025.
The shipment of diesel to China is also seen as a sign of the increasing competition in the global energy market. The COVID-19 pandemic has led to a significant increase in demand for diesel in Asia, particularly in China and India. This has led to a surge in diesel prices, making it an attractive option for refiners to export diesel to other countries.
In conclusion, India’s decision to send a shipment of diesel to China for the first time since 2021 is a significant development in the country’s energy trade policy. The move is seen as a strategic move by Nayara Energy to diversify its market and reduce its dependence on the US and EU. However, the shipment may also be seen as a challenge to India’s efforts to reduce its dependence on imported oil and a sign of the increasing competition in the global energy market.
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