India at the Helm of 'Laundromat' Countries

The 'Laundromat: How the price cap coalition whitewashes Russian oil in third countries' report, released by the Helsinki-based Center for Research on Energy and Clean Air (CREA), reveals that Russian oil is indirectly entering Europe via Laundromat countries.

• 'Laundromat' countries are essentially those nations that buy inexpensive crude oil from Russia, convert it into refined petroleum products, and then 'launder' these in Europe and other G7 nations. These countries include India, China, Singapore, the U.A.E. and Turkey.
• As per the latest findings by CREA, among the five 'Laundromat' countries, India consumes the most seaborne Russian crude globally and exports nearly 3.8 million tonnes of processed oil products to 'Price Cap Coalition' countries.
• The report underscores that Western countries have bought about $42 billion worth of laundered Russian crude in the form of various oil products from nations that maintain friendly relations with Russia.

Areas of Concern

• The report indicates that European countries are merely substituting oil products they previously purchased directly from Russia with the same products now 'laundered' in other countries, buying them at a higher price.
• It emphasizes that the indirect entry of Russian oil into European countries has undermined their attempts to limit funding for Russia.
• The report further accuses Indian sellers and European buyers of bypassing sanctions imposed on Russia by Western countries.

Indian Private Refiners

• Most of the oil products from India were exported from two ports in Gujarat, namely -
  • The Sikka port, which serves the Reliance-owned Jamnagar refinery, and
  • The Vadinar port, which ships oil products from Nayara Energies, co-owned by a Russian oil company named Rosneft.

In Conclusion

• A recent report by CREA has revealed that European countries that have imposed a ban on Russian oil imports are instead importing vast quantities of refined oil commodities from countries that have become the largest importers of Russian crude.
• The report notes that this development is a significant loophole that undermines the impact of the sanctions on Russia and suggests the use of 'place of origin' certifications for the oil products sold to Europe.