Russia last week announced a major new energy cooperation deal with India that threatens the very core of the U.S.’s fightback strategy against Beijing’s and Moscow’s expansionism in the Middle East and beyond.
The main hydrocarbons deal will be for Russia, via oil giant Rosneft, to supply almost 15 million barrels of crude to Indian Oil, by the end of 2022. Given the massive geopolitical ramifications of any sizeable oil deal, it was entirely legitimate for Igor Sechin, Rosneft chief executive officer and close friend of Russian President, Vladimir Putin, to say of the deal that:
“The signing of a new oil supply contract confirms the strategic nature of the long-term partnership between Rosneft and Indian Oil.”
The deal takes on even more significance as it was just one part of 28 investment deals between Russia and India signed during the very recent visit of Putin himself to Indian Prime Minister, Narendra Modi. These covered a broad range of subjects, including not just oil, gas, and petrochemicals, steel, and shipbuilding, but also military matters. The opportunities for bleed-through military elements to appear in the oil and gas projects agreed between Russia and India are bad enough from the U.S. perspective. Rosneft’s oil deliveries will be shipped through the Russian Black Sea port of Novorossiisk, with off-loading facilities in India to be built out when required. Putin highlighted:
“Both sides reaffirmed their commitment to increasing Russian crude oil production under long-term contracts at preferential prices and increasing LNG [liquefied natural gas] imports to India with the possible use of the Northern Sea Route for energy supplies.”
Specifically, added Modi:
“We have set a target of US$30 billion in trade and US$50 billion in investment by 2025.”
Bad these deals are from the U.S.’s perspective of seeing Russia being able to leverage them into military opportunities in India, matters became a whole lot worse as the meetings between Putin and Modi went on.
As it now stands, a joint statement from Russia and India said: “[We have] reiterated their intention to strengthen defence cooperation, including in the joint development of production of military equipment.” Specifically, according to further official statements from one or both sides, Indian will produce at least 600,000 Kalashnikov assault rifles – the weapon of choice for terrorists and militias across the Middle East and elsewhere – and, even more disturbing for the U.S., India’s Foreign Secretary, Harsh Vardhan Shringla, said that a 2018 contract for the S-400 air defence missile systems is now being implemented.
The scope and scale of this coup by Putin in India is as dramatic as it is unexpected, and runs contrary to the U.S.’s expectations of how well its contra-China/Russia strategy in the Middle East had been going. The U.S. fightback against China’s aggressive expansion of influence in the Middle East was founded principally upon the ‘relationship normalisation’ deals that have been made with the UAE, Bahrain, and Israel, and on India’s role as a counterbalance to China in Asia and as a major global buyer of oil and gas, as analysed in depth in my new book on the global oil markets.
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