It is getting harder for India to source natural gas as Russia has slowed down the supply since the Ukraine invasion. Europe is drawing away much of the global natural gas supply to its shores.
“Contrary to widespread alarmism over the adverse impact of the Russia-Ukraine war on global commodity prices, the importance of commodity exports to Russia far exceeds the importance of Russian commodity exports to the rest of the world,” the Yale researchers wrote in the analysis.
Europe depends on Russia for 40% of its natural-gas needs, such as cooking and firing in power stations. In this regard, the Yale authors argued Russia because the European Union has already agreed to end almost all its oil imports from Russia by the end of this year. It is also said that it would cut coal imports starting in mid-August. European countries, including Germany and Italy, are also finding other ways to import natural gas.
The import of natural gas from Russia is affecting India in different ways. India’s economy is facing twin challenges because the current spike in inflation results in the rising price of crude oil and other commodities in the world. The price of crude oil had risen to 83.56 per cent in March from 55.17 per cent in February.
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Putin does not want to sell its resources to Europe. To mitigate the sales, the President is hawking Russia’s energy exports to other markets such as Asia, but at a discount.
Now, when Russia is shrinking its natural gas supply to India, how will it impact the Russia-India relationship? Will Narendra Modi continue business deals with Russia? Stay tuned for the next update!