How oil has brought Russia, China and India closer

Monday’s meeting between Russia’s Vladimir Putin, China’s Xi Jinping and India’s Narendra Modi marked a rare display of solidarity – and an opportunity for Putin to engage directly with his country’s top oil buyers.

India and China were drawn to Russian oil, which became cheaper after Western countries cut trade ties with Moscow over its 2022 invasion of Ukraine.

But Beijing, New Delhi and Moscow have taken their ties deeper.

They now share a common antagonist in the US, which has imposed sanctions on Russia and put sweeping tariffs on its trading partners.

India is reeling from some of the highest duties imposed by Washington for buying oil from Russia. China is still negotiating a deal with the US that would stave off crippling tariffs and possible sanctions for buying Russian crude.

The three leaders met at Tianjin for the Shanghai Co-operation Organisation (SCO) summit. The regional forum aims to promotes an alternative worldview from the West’s – in what analysts have described as a challenge to America’s influence.

The forum gives the leaders a rare chance reinforce ties during ongoing economic uncertainty, analysts told the BBC.

Russia has the opportunity to secure more business with India and China, its largest trade partners, they said.

The two most populous countries have helped prop up Moscow’s economy after its invasion of Ukraine left it cut off from most Western trade.

Last year, China purchased a record of more than 100 million tonnes of Russian crude oil, which accounted for almost 20% of its total energy imports.

Likewise, oil exports to India, which made up only a small fraction of its imports before the Ukraine war, has since grown to some $140bn (£103.5bn) since 2022.

Together, China and India make up the majority of Russia’s energy exports.

Russia relies on oil and gas exports for roughly a quarter of its budget revenues, which is funding its war chest.

It wouldn’t be surprising if Moscow offers further discounts in order to secure more trade with India and China, public policy expert Mandar Oak told the BBC.

This is especially necessary for India to ensure it does not back away due to pressure from the US, said Prof Oak from the University of Adelaide.

New Delhi had offered Russia a lifeline after much of the oil supplies displaced by Western sanctions were diverted to India, which benefited from cheaper energy.

India could now be on course to buy even more oil from Russia, despite condemnation from Washington.

Modi on Monday affirmed ties with Moscow, telling Putin their countries “have walked together shoulder to shoulder”. New Delhi officials have also said it will buy energy from where it gets “the best deal“.

Delhi-Washington ties hit an all-time low after the Trump administration imposed an additional 25% tariff as a punishment for buying Russian oil. New Delhi described the White House’s decision as “unjustified“, given their history of trade.

For Prime Minister Modi, the move would burnish his image at home.

“Politically, it is almost beneficial for Modi to snub the US” as it sends a signal that India will not buckle down to pressure from the Trump administration, Prof Oak said.

Buying more Russian oil is economically sound as India relies heavily on foreign suppliers for crude.

India was once a key customer of the Middle East, but turned to discounted crude from Russia after Western sanctions were imposed on Moscow following the Ukraine invasion in 2022.

Indian refiners have since enjoyed lower costs due to cheaper supplies, with Russian oil cheaper than Middle Eastern alternatives.

China, which has also ramped up its purchases of oil from Russia, will be eager to safeguard its energy interests as the leaders gather at the summit, said trade policy expert Peter Draper.

On Tuesday, Russian and Chinese gas corporations agreed to raise supplies to the Asian nation.

But Russia might not offer the same discounts to China, especially if Putin secures more sales to India, said Prof Draper.

Beyond trade, perhaps China’s main goal at the SCO summit is to show it can be a strong alternative to the US, especially after Trump’s recent policy moves, said Prof Draper.

At the forum, China stands alongside countries like Pakistan, Myanmar and Sri Lanka that have all been hit with Trump’s tariffs.

China has long desired to promote a “multi-polar” world order, Prof Draper said, referring to the concept of a system in which power is distributed among several major players.

The summit has brought together three countries whose economic ties have long been complicated by geopolitical tensions, said Prof Oak.

But in the face of the economic threat of the US tariffs, the countries have “strong economic interests to join hands”, he said.