In fact, India imported more Russian crude oil in a single month this June than in any month since the trade restarted three-and-a-half years ago, as Russia's big oil revenues were slipping away behind its back. Indian refiners' purchases of Russian crude have risen by 34 per cent from a month ago in the latest trade-flow data compiled by the Centre for Research on Energy and Clean Air, raising India's total Russian hydrocarbon bill to EUR 5.5bn, making it the world's second largest buyer of Russian energy behind China's EUR 7.3bn.

The figures speak of two economies that are moving in opposite directions. India's crude imports were actually up 5.4 per cent month on month, but the Russian component in the basket shot up, as did individual refiners. Deliveries to Reliance's Jamnagar complex, home to the world's biggest single refining facility, increased 150 per cent from May. Indian Oil Corp's facility in the port of Paradip added 126 per cent, Bharat Petroleum's refinery at Kochi jumped 83 per cent and Nayara Energy's plant in Nayargarh's Vadinar Unit went up 45 per cent. Industry observers separately estimated that Russia accounts for about 46 per cent of India's crude basket for the month, reaching a record level as purchases increased to about 2.6 million bpd. Iraq, which had been India's most important supplier for decades, now supplies less than a million barrels a day and the share of the Middle East in Indian imports is now at its lowest ever.

The awkwardness is that Moscow isn't really earning as much as you might think from this surge. Russia's crude exports did increase 14 per cent in June, driven by increased demand from India and China, but crude revenues per day declined 8 per cent to EUR 348 million due to weakening global oil prices. Russia's overall daily income from fossil fuels dropped 1 per cent despite an increase in shipped volumes by 7 per cent. In simple terms, Moscow is marketing its oil at a discount, and India has one of the largest appetites to support the volume side of the equation while price weakness is taking its toll on the value side.

There is also a decided hypocrisy in the figures the Indian authorities have been pointing to behind closed doors when they are scolded by the capitals of the west on its energy policies. India, Turkey, and the other two nations Georgia and Brunei combined shipped EUR 814 million of refined fuel to countries that have also imposed sanctions on Russia, such as the European Union, Australia and the United States. Of this, an estimated EUR 369 million was refiners' Russian feedstock. Even though Brussels had declared a ban on products from Russian crude, two cargoes from Indian refineries were still received at European ports last month. Britain, meanwhile, received its first ever cargo of Jamnagar refined jet fuel, under an exception to allow diesel and jet fuel made from Russian crude, which arrived at Thames Haven and the Isle of Grain, respectively. The pattern holds true for Turkey's Tupras Izmit refinery, which supplied 60 per cent of its feedstock from Russia in the previous quarter, and which is still exporting to the American market. The optics are not to be ignored: those same governments that say that India should eliminate Russian barrels are, in fact, still eating the fruits of that same barrel, which has gone through a processor beyond Russia.

Washington is now attempting to tighten the screws, specifically against this background. A bipartisan group of senators, led by Lindsey Graham and Richard Blumenthal, received the backing of the Trump administration earlier this month for revised legislation that would allow tariffs up to 500 per cent on countries that continue to purchase Russian energy, particularly China and India. It has 85 co-sponsors, which is enough to break a Senate filibuster, and the leadership of the Senate has indicated it would put the bill on the floor when the votes are secure, in theory giving them enough time to kill it. But even supporters of the measure acknowledge that it has its enforcement problems. On 17 June, a US Treasury licence that had protected Indian purchases from sanctions exposure expired, as refiners have to deal with the current surge without such protection. Treasury officials who have been following the tariffs issue have publicly doubted whether they could ever be a viable means of enforcement, even as both the United States and India try to reach a comprehensive trade deal without being completely cut off.

The calculus for New Delhi is energy security and not geopolitical ties. India is importing about 9/10 of its crude and cheap Russian crude has been acting as a direct subsidy to India's refinery margins and consequently to the domestic crude prices and inflation control. This year's conflict in the Strait of Hormuz had Indian refiners little option but to rely more on Moscow, after earlier this year they had reduced their purchases of Russian crude to about a million barrels a day. The officials have time and again presented these purchases in the guise of a sovereign right and not as a favour to Moscow, saying that these are based on money affordability and supply continuity, not politics. The next few months are likely to see if that continues to be the case or if the threat of a 500 per cent duty finally gets the attention of India's oil marketers to "rethink the numbers".