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India has become Europe’s biggest supplier of refined fuel last May surpassing Saudi Arabia, according to analytics firm Kpler. This was due to Western sanctions that have cut off direct oil flows from Russia, the main source of oil for Europe.Taking advantage of the western sanctions on Russia following Russia-Ukraine conflict, India started to buy discounted oil from Russia in large quantities. And after refining the crude at home, it began to export to oil-starved Europe.The Russia-Ukraine conflict has offered India an opportunity to boost purchases of discounted Russian oil. Crude imports from the sanctions-hit country jumped to $31 billion during the twelve months to March, 2023 from just $2.5 billion in the previous year, Indian government data show. Europe’s refined oil imports from India are predicted to exceed 360,000 barrels per day soon, helping to fill the gap left by the ban of Russian oil. This move, however, is benefitting Moscow, since record imports of cheap Russian crude oil have enabled Indian refiners to export diesel and jet fuel to Europe, thereby boosting demand for Moscow's barrels and but resulting in extra freight costs for Europe.Record imports of cheap Russian crude oil in 2022-23 has enabled Indian refiners to export finished jet fuel and diesel products to Europe, according to reports tracking shipping data collated by Kpler and Vortexa. According to a Reuters report, Europe imported 154,000 barrels of oil per day from Indian refiners before the Russia-Ukraine war. Those imports surged to 200,000 after the European Union banned Russian oil on February 5, as per Kpler data.The market research firm, Kpler further estimated that India’s imports of Russian oil is slated to increase further and is expected to be over two million barrels a day amounting to nearly half of India’s overall oil imports. No wonder, for while the rise in discounted oil import from Russia will keep the oil prices stable at home, it will also help India to earn more foreign currency through export of refined oil.India emerged as a major market for Moscow in FY23, as the latter offered steep price discounts on crude in view of the western sanctions and a ban on shipments to Europe. Despite facing Western opposition India has continued to meet its energy demands through Russian oil saying that it was for the best of its national interest. Not doing so would have caused a serious economic problem for India due to imported inflation as a result of rising oil prices. A rise in oil prices has multidimensional impact on the overall price index. Maybe, this was one reason that inflation rate in India has stayed largely stable when it has gone overboard even in the developed countries.India depends on imports for about four-fifths of its crude consumption. Higher imports of crude oil from Russia offered India three benefits: curbing inflation, improving its trade balance and diversifying supply.In terms of inflation, the benefits of Western sanctions are clear: India bought Russian oil at an average price of $83 a barrel in the 2022 fiscal year, compared to $90 for Iraqi oil and $100 for Saudi cargoes.Russia emerged as the leading exporter of crude oil to India based on its value, with crude imports from Russia valued at $ 3.35 billion, followed by Saudi Arabia at $ 2.30 billion, and Iraq at $ 2.03 billion. The imposed Western price cap of $ 60 per barrel aimed to restrict Russian oil revenues while ensuring the continuous flow of oil to avert a global price upheaval.Gasoline, naphtha, gas oil and heavy oil are all made from crude at different stages of refining. Many oil producing countries simply export any excess products. India, despite having no large oil reserves of its own, has still managed to successfully develop a large oil industry by strategically planning exports of its petroleum products. Last fiscal year, crude oil was India's biggest import item, while petroleum products made up the largest share of exports.According to the ministry of petroleum and natural gas, India exported petroleum products worth $86.21 billion during the first 11 months of last financial year, which accounted for more than a fifth of the country’s total commodity exports.There has been another big thing that has happened; India's international stature has grown sharply due to its role as the effective leader of the so-called Global South, a shorthand term for emerging and developing economies that do not align with any major power blocs.However, West now finds it difficult to accept that the sanctions on Russian oil has proved a failure following India’s increasing imports. In fact. India’s yearly oil products sales to Europe have shot more than 70% to $15 billion in the past year, according to data from the Indian ministry of commerce and industry. The trend shows that trade restrictions are not watertight. And if Europe wants to plug sanctions loopholes, the possibility of an energy crisis followed by an unprecedented inflation resurgence makes a European Union ban on Russian oil reselling a tough decision.Showing EU’s concern Josep Borrell, the European Union’s high representative for foreign affairs and security policy, has recently called for a crackdown on export of petroleum products from India. However, enforcing a full-blown embargo, which requires unanimous support from all 27 EU states, would be hard as most of them are suffering from oil scarcity and rise in oil prices. Even otherwise, refineries blending a basket of crudes from different sources before processing, making it difficult to identify the origins of each barrel. India argues that oil products substantially transformed in a third country cannot be subject to EU sanctions.India on its part, however, is showing no signs of either reducing its large-scale oil imports from Russia or export of refined petroleum products. In last May, India brought in 1.96 million barrels of Russian crude a day, according to the Press Trust of India news agency. The daily average hit records for eight months in a row.But if Borrell sees defeat of Western sanctions in India’s large scale import of Russian oil and its export to Europe after refining, the world finds in it the best escape route for Europe and other oil importing countries from escalating inflation, which is already at record level.In a recent article, NikkeiAsia, world’s largest circulated Japanese financial newspaper writes “at first glance, Modi's "India First" policy seems to have helped Russia weather Western sanctions, but a careful study of trade figures reveals that what could look like an act of selfishness by India appears to have had benefits for others.First, by increasing its imports from Russia India freed up more oil for countries in Europe and elsewhere so that the supply-demand mechanism did not go overboard in favour of suppliers unilaterally giving them a chance to raise prices at will. Second, India has also refined a large portion of imported Russian oil into products to be sold to countries that have joined the sanctions. India's petroleum products appear to have offset shortages of Russian supplies to the EU.India has been able to play this role in smoothing global flows of oil and oil products because it is the world's third-largest importer of crude and its fourth-biggest exporter of petroleum products, the article has argued.