Critically discuss the India-Russia engagement in Hydrocarbon sector keeping in view the challenges posed by current global geopolitics.
Russia’s natural resources attract resource-hungry India. Russia is a time tested friend of India. Hydrocarbon sector provides with opportunities to diversify the relations.
But the global geopolitics and the resurgence of multipolar world poses some of the unique changes for engagement in Hydrocarbon sector
Tensions between Russia and west
The Ukraine crisis, Russian intervention in Syria has widened the rift between Russia and West. Westren countries have opted for the sanctions route against Russia. But the increasing cooperation between India and Russia may result in friction in western countries. The nexus of India and Russia in Hydrocarbon sector may limit the impact of sanctions of west on Russia. Hence the western countries through diplomatic channels pressurize India to reconsider its relations with Russia.
Fluctuating Crude oil prices
The crude oil prices are fluctuating due to Iran coming out of isolation, US aggressive exploration of shale gas, OPEC planning for production cuts. These fluctuating crude prices may deter in going for long term contracts. The climate change impact, new factors of the geo-politics will result in lags in stabilizing of relationships into commercial ventures which is profitable for both India and Russia.
Falling Value of Ruble
As Russia is witnessing the challenges of economic slowdown together with western countries sanctions against Russia, Russian currency ruble is facing challenges of depreciation. This may result in challenges in commercial viability as the global crude oil prices are also fluctuating.
Russia’s aggressive attempt to regain the lost space in global geopolitics is facing stiff resistance. It is also a signal for the strengthening of multipolar world. India must carefully strategies so that the energy security of the country can be synergized with Russian concerns and India’s energy security.