A new report by the Helsinki-based Center for Research on Energy and Clean Air (CREA) has highlighted that India leads the “Laundromat” countries that purchase crude oil from Russia and sell processed oil products to European countries. This is an important topic for the International Relations section of the UPSC exam.
What are “Laundromat” Countries?
“Laundromat” countries refer to nations that purchase cheap crude oil from Russia and convert it into refined petroleum products. These products are then “laundered” in Europe and other G7 countries. Among the five laundromat countries named in the report, India, China, Singapore, the U.A.E. and Turkey are included.
India’s Position in Laundromat Countries
As per the CREA report, India is the highest global consumer of seaborne Russian crude among the five laundromat countries. India exports close to 3.8 million tonnes of processed oil products to “Price Cap Coalition” countries. The “Price Cap Coalition” bars trade and insurance for any oil purchased above a certain price from Russia. The Price Cap Coalition countries include the European Union (EU), G-7 countries, Australia and Japan.
Concerns Highlighted in the Report
The report notes that European countries are substituting oil products they previously bought directly from Russia with the same products now “whitewashed” in other countries, bought from them at a premium. The back-door entry of Russian oil into European countries has blunted their efforts to restrict funding for Russia. The report further accuses Indian sellers and European buyers of circumventing sanctions imposed on Russia by Western countries.
Private Indian Refiners
Most of the oil products exported from India were shipped from two ports in Gujarat – The Sikka port that services the Reliance-owned Jamnagar refinery and the Vadinar port that ships oil products from Nayara Energies, co-owned by a Russian oil company named Rosneft. According to the report, the Vadinar port is of great value to Rosneft and the overall Russian oil industry. The Sikka port is the largest importing port of seaborne crude oil from Russia in the world and the largest oil product export port to the price-cap coalition countries.
Important Points:
- 🛢️ India leads the “Laundromat” countries that purchase crude oil from Russia and sell processed oil products to European countries
- 🌍 “Laundromat” countries are those nations that purchase cheap crude oil from Russia and convert it into refined petroleum products
- 📊 India is the highest global consumer of seaborne Russian crude among the five laundromat countries and exports close to 3.8 million tonnes of processed oil products to “Price Cap Coalition” countries
- 🇪🇺 The “Price Cap Coalition” includes the European Union (EU), G-7 countries, Australia, and Japan and bars trade and insurance for any oil purchased above a certain price from Russia
- 🌡️ The report notes that European countries are substituting oil products they previously bought directly from Russia with the same products now “whitewashed” in other countries, bought from them at a premium
- 🚫 The back-door entry of Russian oil into European countries has blunted their efforts to restrict funding for Russia
- 📜 The report accuses Indian sellers and European buyers of circumventing sanctions imposed on Russia by Western countries
- 🛳️ Most of the oil products exported from India were shipped from two ports in Gujarat – The Sikka port that services the Reliance-owned Jamnagar refinery and the Vadinar port that ships oil products from Nayara Energies, co-owned by a Russian oil company named Rosneft
- 🧐 The Vadinar port is of great value to Rosneft and the overall Russian oil industry
- 🌎 The issue is of significance in the context of international relations and requires attention from policymakers.
Why In News
According to a new report by the Helsinki-based Center for Research on Energy and Clean Air (CREA), India is the top global consumer of seaborne Russian crude among the “Laundromat” countries. The report reveals that India is exporting close to 3.8 million tonnes of processed oil products to “Price Cap Coalition” countries in Europe, raising concerns about the backdoor entry of Russian oil into Europe via India and other such nations.
MCQs about “Laundromat” Countries
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Which of the following countries are named as Laundromat countries in the CREA report?
A. India, China, Singapore, the U.A.E. and Turkey
B. India, China, Japan, the U.A.E. and Turkey
C. India, China, Singapore, the U.A.E. and Brazil
D. India, China, Singapore, the U.A.E. and South Africa
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What is the Price Cap Coalition mentioned in the report?
A. A coalition of countries that limit their oil imports from Russia.
B. A coalition of countries that have imposed sanctions on Russia.
C. A coalition of countries that have been buying laundered Russian crude oil.
D. A coalition of countries that are major oil exporters.
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Which Indian port is named as the largest importing port of seaborne crude oil from Russia in the world?
A. Sikka port
B. Vadinar port
C. Mumbai port
D. Kandla port
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What is the key concern highlighted by the CREA report?
A. Western countries are purchasing laundered Russian crude oil at a premium.
B. India is exporting close to 3.8 million tonnes of processed oil products to European countries.
C. Russian oil is getting backdoor entry into Europe via Laundromat countries.
D. The Vadinar port is of great value to Rosneft and the overall Russian oil industry.
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