India, the Largest Importer of Russian Coal
In March, India’s coal imports from Russia could be the highest in more than two years, as Indian buyers continue to buy the fuel from a market.
Vessels carrying at least 1.06 million tonnes of coking coal, primarily used for steelmaking, and thermal coal, used mainly for electricity generation, should arrive at Indian ports in March; the most since January 2020.
Russia is usually India’s sixth-largest coking and thermal coal supplier; it could offer more competitive prices to Chinese and Indian buyers as European and other customers avoid Russia due to sanctions. Traders said that adding a rouble-rupee trading arrangement could also help the trade. According to the Indian consultancy Coalmint, approximately 870,000 tonnes of. Since mid-February, the figure would be higher if more coal were loaded at Russian ports. Russian vessels typically take about a month to deliver to India.
Since the SWIFT ban and Russian sanctions, Indian buyers have taken a back seat. They are looking for alternatives in Australia and the United States.
However, at least three coal-laden ships sailed from Russian ports to India after Russia launched its invasion of Ukraine on February 24.
Indian buyers are still bringing coal from Russia into the market. However, it is becoming increasingly difficult because banks refuse to open credit letters.
Oil Price Shock Jolts Global Recovery
Since the 2008 financial crisis, the highest oil prices are dealing a heavy blow to the global economy; it is bringing Europe’s pandemic recovery to a halt and complicating the United States’ fight against inflation.
China, the world’s largest oil importer, will almost certainly struggle to meet this year’s economic growth target while developing countries in North Africa and the Middle East face the risk of social unrest as energy and food prices rise.
According to Goldman Sachs, the disruption of Russian oil shipments, combined with the import ban announced by President Biden on Tuesday, represents one of the most significant supply disruptions since World War II. With other major oil producers unable or unwilling to increase output in the short term, Brent crude, the global benchmark, hit $128 per barrel earlier this week, up nearly 65 percent since January 1.
Brent fell further Thursday; it closed just shy of $110 after falling Wednesday, hoping for a negotiated settlement in Russia’s war on Ukraine. The likelihood that oil prices will remain high for the rest of the year; on the other hand, it should reshape consumer spending; weigh on financial markets, and strain government budgets in dozens of countries.
Rising oil prices effectively redistribute income from European and Chinese consumers to producers such as Saudi Arabia, Russia, and Canada. Producing countries spend less of each additional dollar than consuming countries, implying that higher oil prices reduce overall economic activity.