Western sanctions have pushed Russian oil exports underground and catalysed the creation of a new and complex oil supply chain. The various links in this chain include tankers for shipment, financiers that cough up the money until payments are received from the end customer and, perhaps most significantly, insurers. The centre of gravity for oil trading has rapidly shifted from Geneva to Dubai, bankrolled to a large extent by the Russian states.
India and China have so far benefited from discounted prices on Russian oil and Brent prices remain substantially below their June 2022 peak. However, as GDP growth in China rapidly accelerates - perhaps even to 10% this year - oil importers like India may soon need to contend with prices in excess of USD 100  a barrel. This will have a huge impact on India’s current-account position, as well as consumer demand and sentiment.
In this podcast episode, Adit discusses his thoughts on the subject.