dani: this is "bloomberg daybreak: europe." i'm dani burger with the stories that set your agenda. turning on the taps, crew crumbles as the white house weighs a massive relief with reserves. russia offers oil to india at a steep discount. the u.s. says president putin has been misled about the war in ukraine. germany says russia is backing off the man's for gas payments

and rebels. turning to beijing, apple is seeing potentially the first from china chip suppliers. you made it to the last day of a quarter that felt like a decade. in the past few weeks it is a quarter where twos and tens have turned, and oil continues its volatility, especially with the u.s. eyeing strategic release of reserves. will the volatility ease up? it was said yesterday we are one standard deviation away from a black swan event. volatility is alive and well especially in oil. wti declining 6%. a lot going on in the oil sector, and an opec-plus meeting, and the white house looking at a release. we will get into that in a moment. the calmer oil picture and high

prices has been supporting equities this morning. s&p 500 up 0.2%. euro stocks up nearly 0.5%. russia will expand the equity trading hours and lift a ban. foreigners cannot trade in this market. a little bit of bond buying, higher yields ease and energy prices. a stronger dollar, and to go along with oil story, commodity currencies weakened today. previously, some of that weakness in the yen has come back. the yen had been getting versus the dollar but the doj continues to buy bonds, continuing to weaken the yen. let's get to our top stories and reporters around the world. joining us on oil is andrew in singapore, russia is selling oil

to india at a steep discount. on the latest with the war in ukraine, our correspondent, maria tadeo. and for the market action we have juliette saly. the biden administration is considering a plan to release a million barrels of oil a day from u.s. reserves. people familiar with the matter told bloomberg the release may be as much as 180 million barrels over several months. andrew, tell us more about what we know about the u.s.'s plan? andrew: the point to make is this is a big release, 180 million barrels is a lot bigger than the 50 million that was released in november, and the 30 million in march. the other difference with those releases, they will drip feed it into the market at about one

million barrels per day, and that will take place over several months. it will have a big market impact, we sub prices drop six dollars a barrel and it is holding that level now. there is also a chance other countries may chip in more. the international agencies looking to do that with other nations. it will have a significant impact on the market. the other interesting thing is the timing. it is apparently an official announcement that could come as early as today. this is the same day that the opec-plus alliances having their monthly meeting on supply. they are expected to go with another very modest supply increase. the u.s. and other countries are getting increasingly frustrated

with opec-plus. toward the end of last year, they were refusing to pump more even as demand kicked in from the pandemic, and then there reaction to russia's invasion of ukraine, they did not refuse to pump more, and they discussed the issue at the last meeting where they met only 13 minutes and did not discuss the russian invasion at all. this is definitely a reaction to that. the ministers met a couple of days ago and said, trust us, we know what we are doing. this could be seen as a reaction to that. dani: to your point, opec is looking at no longer using iaea data, getting into the political divergence. thank you. meanwhile, russia is said to have offered india oil at a steep discount to its prewar price as mounting international pressure lowers the appetite for

its barrel since the invasion of ukraine. what do we know about this offer from russia? >> that is right, negotiations are going on and russia has come forth with a steep discount for indian refiners to get more oil to them directly. the prices they are talking about is as much as $35 to the prewar price for the flagship benchmark. that is a big offer for india. too sweet to not take. the russian foreign minister is arriving in delhi tonight and

will hold meetings tomorrow, and they will discuss a possible ruble trade between the countries. it is a very attractive offer from the russian side. dani: thank you very much. staying on this energy theme, germany says president putin is backing off his demand that berlin pays for russian gas in rubles. the white house says putin was misinformed by his advisors on the war. let's go to maria tadeo in budapest. when it comes to russian energy and paying in rubles or lack thereof, this is a climb down from putin who demanded that. maria: it depends on who you

ask. if you speak to german officials who were briefing us yesterday, it seems that the kremlin backed down. a spokesman for the german chancellor said yesterday that the men had a conversation, chancellor schulz and president putin, and did not call, the russian leader agreed to contracts would continue to be exercised as they have been until now, meaning the germans would pay in euros. then nick is deposited and -- then it gets deposited and russia can convert it to rubles, but the payment would not be cashed in rubles. that was a demand resident putin made -- president putin made when you look at what the kremlin said, they were brief on detail and said they are only looking at this from an expert panel and committee that would look at the details how to transfer those payments. for many, they would tell you if russia is able to get their hands on euros and turn them into rubles, and they made money

out of this commercial transaction with the european union, then it is the same dilemma, you are paying for this war. that defeats the point. dani: you are in what looks like a rainy budapest, hungary today. victor or bond is gearing up -- victor orban gearing up for an election, how is that playing out. maria: some tricky logistics and politics in budapest. when you look at the foreign policy that viktor orban is carrying out, he has made it clear he wants to keep the country neutral and not get involved. hungarian tv talk about a conflict, not a war. the language is important. they wore means there is an

aggressor in the country being invaded. you talk about two countries that bear some responsibility. orban said there is no weapons delivery from hungary, and he said he would veto any potential energy embargo on russia. a lot of this reflects his own personal contradictions. he was one of the western leaders who want to see vladimir putin before the war broke out, they were on good terms. they were drinking champagne and having a toast. he said he has a good working elation ship with russia, but the other big issue is that all of his neighbors including poland, the usually have close policy, they are incredibly hawkish on russia and point the finger at viktor orban, saying this is not the time to play best friends with a man who has triggered the war. dani: thank you, maria tadeo. over to china, where its manufacturing is playing into

market sentiment across the region. let's to juliette saly with the details. some disappointing numbers in those pmi's. juliette: absolutely, particularly looking at manufacturing that is in contraction territory for the first time in five months, and below estimates. it does not fully capture the a full effect of the lockdowns in shanghai and shenzhen. we are hearing news of a full covid tilt and china in terms of further lockdowns, pushing ahead, suggesting you could see further pain in manufacturing. nonmanufacturing in contraction territory, also below what the market was looking for. the positive is there is more chatter that there is easing from the pboc. it is a down day across asia. after two sessions of gains, and

weakness in the chinese equity market. in the tech sector, we have had three sessions of gains, but the sec chair pouring water on the tamping down of companies being delisted. we have seen share prices fall as much is 5% in hong kong sessions. dani: it is nothing if not volatile in chinese tech. thank you so much, juliette saly in singapore. coming up, oil slides as the u.s. considers releasing strategic reserves. we will discuss the impact on the oil market. also coming up, ryanair ceo michael o'leary joins us. do not miss that interview later in the hour. this is bloomberg. ♪

dani: welcome back to "bloomberg

daybreak: europe." i'm dani burger in london. oil is slumping as the u.s. considers tapping reserves to tackle high inflation and supply shortages due to russia's invasion of ukraine. a biden administration could release as much is 180 million barrels from its reserves over the next month. the implications are being felt across marches. -- across markets. joining us now is rupert thompson, cio / managing director, kingwood holdings. we are seeing cheaper oil prices this morning, still above $100 per barrel, but the market is taking and discounts to oil prices. are you taking comfort in that? rupert: we think the spr release from the u.s. is larger than expected. as your previous guess highlighted, it does not solve the longer-term problem. the problem is also gas.

short-term it means the rally and equity markets may have further to go, but the underlying issues, there is still a lot of uncertainty. the rally may go further, but it is overdone to some extent. dani: the equity rally is overdone, you are underweight u.s. stocks. what would it take for you to change that outlook, or is it about price too expensive, therefore avoid? rupert: you hit the nail on the head, the number one reason for being underweight u.s. is the fact that valuations the course to never. if you look at the price-earnings ratio, they are trading at 60% premium to the rest of the world, a new high. it does not mean u.s. stocks will underperform. they have been outperforming again recently. our one-year view, two year view

is the reason why we think it will underperform. short-term, it is a long ways from ukraine. dani: let's say i'm an investor who wants to be in equities but i do not want cash on the sidelines. where could i go to find safety and comfort if we go to this environment where the rally is overdone in the markets turn from here? rupert: to the extent there is further upside it is in the non-us markets, but having said that, if you want safety, it is not where you want to go. for safety, you go to the defensive sectors such as consumer staples. these have pricing power. dani: even moving outside of the u.s., that is a bit of a

contrary and take because you have europe in the throes of the specter of war and china dealing with economic data that is disappointing. what you say to those who say the u.s. boom economy is the only game in town? rupert: short-term, i agree, it is the only game in town. people still really do not like the u.k. if all these worries do start to reseed over coming months, that is when you will see these markets outside the states rebound. the u.k. is very cheap. then you will see these markets outperform. in the short term, you are right. there are a lot of risks in the cheaper markets. dani: a lot of what is driving concern about risk is the economic picture. yesterday it was said that we

are dangerously close, one standard deviation away from a black swan event. the fed not be able to control inflation or engineer a soft landing. for those who see this type of environment akin to the financial crisis, do you join that crowd, or are you concerned about this level of shock to the economy? rupert: we definitely think there is a lot of uncertainty and considerable risk for a policy error. who knows where inflation will peak out? at this stage, there are tentative signals from the yield curve that we are heading into recession. our base cases that we are not heading into a recession. we are heading into a slowdown and a stagflationary environment , and equities seeing more upside. we do not buy this recession

scenario at this stage. oil could go back to $150, that is possible. dani: if we are headed for something more stagflationary, does that mean the fed, their increased hawkishness, you have it called groupthink and it will not sustain itself, and cuts may come sooner than the market expects. rupert: i think 2023 is anyone's guess. you look at the range of forecasts, but in terms of the next 6-12 months, my guess is we will see substantial rate hikes. unless things go radically wrong or do we go to $150 per barrel of oil -- i think 2023, but this

year, no. dani: to your point, oil is the wildcard. what you are talking about, largely priced in the rate cuts to come at this point? rupert: i think it is to some extent. the yield curve is causing worries about a recession, and our feeling is that there is a lot of uncertainty, the yield curve has been a good signal for recession, but there are big distortions this time from quantitative easing. even the fed tightening is priced into the market, then you may get the yield curve steepening again. it is another source of

uncertainty, and something for people to worry about. dani: michael schumacher from wells fargo said recently that the buying on the long end, they are keeping long and yields suppressed because of quantitative easing. that is a fundamental reason why the yield curve does not have the same predictive power. really fantastic to have you on, that is rupert thompson, cio / managing director, kingwood holdings. coming up, diversifying chips, apple looks to expand its memory chip suppliers, including considering a chinese maker for the first time. that is next. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe." i'm dani burger in london. apple is looking to diversify supply chain for memory chips

after a production disruption at a key japanese partner, exposing the risks to the global supply. we are joined by european markets anchor, tom mackenzie. apple looking to china, what are the broader implications? tom: one of the japanese suppliers had a major contamination issue. that diversify that further, and add additional names. they already have samsung and micron. they started to look within china, and including chinese chips in their products. they have not signed off on it yet. the chinese company as a provider and builder of memory chips. not the most cutting edge, but the ones apple could choose for the lower end phones. it would be a major coup for

china who have ambitions to build out their own semiconductor industry and be less reliant on the u.s. there is potential political backlash for apple given the relationship between beijing and washington, but apple builds many of its devices in china. we will see. they are in the investing phase, but it is interesting they have gone this far with the potential supplier from china. dani: apple in general, there is a lot to unpack, learning yesterday about a potential in-house financial payment system. tom: operation break out, they want to move away from partners they relied on within the financial services. it reminds me of the service wechat have. they want to do their own credit checks and build out their own financial to become less reliant on partners. they say it will be for future products and not current

products. certainly a reminder that apple wants to be a bigger player in the financial services industry. dani: before we let you go, hackers getting into meta and apple, what are the details? tom: you think about sophisticated engineers in that organization, they are highly skilled. they faced this hack from teenagers in an apartment in the u.k. who have used these emergency requests pretending to be law enforcement, and given some data and physical addresses and ip addresses by apple and meta. it is a reminder of the potency of these hacks. and apple, who prices security, needs to do more to shield themselves. dani: thank you so much, tom

mackenzie. coming up, we get back to the energy story with oil under pressure. we have more on the report about a possible release of u.s. at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met. supersonic wifi only from us... xfinity. dani: this is "bloomberg

daybreak: europe." i'm dani burger in london. turning on the taps, crude tumbles as the white house ways a massive release of reserves to battle rising gasoline prices. russia offers oil to india at a steep discount. president putin has been misled about the war in ukraine, according to the u.s. germany says russia is backing

off on gas payments and rebels. apple is exploring new memory chip suppliers and potentially its first from china. it is the last day of the quarter that felt like a decade, and the volatility has not gone down. in the past week we have seen two tens invert briefly. this quarter is one we saw oil start at $80 a barrel and swing up to one or a $30, now it is back to around $100 per barrel. oil is the focus today, and many days due to the impact on the war in ukraine and today's announcement from the white house of more reserve releases potentially. today we are seeing oil prices, wti in new york declining more than 6%. that is giving a left to equity markets. equities declined yesterday but they are back ever so slightly, especially in europe, up 0.4%.

we are seeing a 10-year yield that is a little changed, a touch selling about one basis point. a quick look on currencies as well, we are looking at the dollar move higher with oil moving lower. commodity currencies are weakening. the again is weaker today after -- the yen is weaker today. they are prioritizing the yield curve bond buying versus a weaker curve. the biden administration is said to be considering a plan to release one million barrels of oil per day from the u.s. reserves. the total release may be as much as 180 million barrels over several months. joining us is andrew janes. at this point, what do we know about the u.s.'s plan and how effective this will be to lower races at the pump? andrew: the point to make about

this release is it is big, 180 million barrels. that compares to a 30 million barrel release in november, and 30 million barrels in march. it could get bigger because the international energy agency will be attempting to coordinate it with u.s. allies. it is a big release. it will be a drip-feed into the market. it will not be enough to replace all the russian barrels but it will have a significant impact. we have seen prices move down seven dollars a barrel and's the announcement -- since the announcement. the other interesting thing is the timing. we have the opec loss alliance

having the regular meeting on supply later today. this comes in context of the oil consumers getting increasingly frustrated with opec-plus not returning more oil to the market. oil consumers were said to trust , but it is clear the u.s. and others do not share that. dani: i think i heard a crash of lightning, stay safe. at the same time, russia is said to have offered india oil at a steep discount to its prewar price. there is mounting international pressures lowering the appetite for russian barrels since the invasion of ukraine. what exactly is russia offering india? how likely is india to take them

up on the offer? >> what we have collected from speaking to various people engaged in discussions that russia is offering a steep discount, as much as $35 per barrel to the prewar price, so that is a lot of discount for india to buy russian crude. the russian foreign minister is arriving in delhi today for more discussions on that front, and more about india local currency versus the ruble trade between the countries. that is a big offer from the russians.

international pressure mounts, people are looking away from russian barrels. dani: opec and its allies, amid all this news, are expected to ramp up calls to fulfill the supply gap from russia. the 23 nation group is meeting today to approve plans for monist production increased spirit importers want the group to make a more substantial increase. joining us now is dr. sara vakhshouri, president / founder, svb energy international. thank you for joining us. i want to start with the release of sbr from the u.s. we are seeing oil prices fall today, but how much relief do you see this having on a tight oil and gas market? dr. vakhshouri: as you and your other guests said, this will not

be a complete substitute for russian barrels missing from the market. it will have an impact on market sentiment, and the war premium that increased the prices. it will have that compounded impact to bring prices down after the opec meeting today. dani: what are the arguments that i have seen, and this comes courtesy of jim biamco, if 180 million barrels is what gets removed from the coffers of the strategic reserve releases, does that mean at some point the white house will have to refill them? because they will refill them, it means there is a buyer for 180 million barrels, therefore prices will remain just as tight as they were? dr. vakhshouri: it is like a

movement in a pool of liquid. if you are pushing the water to one side, it goes to the other side, so it is not a quick fix to the market. it will have a psychological impact on the market but at some point -- as we get to warm weather, the prospects of mediation between ukraine and russia. it is buying a few more weeks but at some point it is going to be creating vulnerability in the market. most of these are going from one pocket to another, playing games to bring temporary relief.

dani: the other potential coming dynamic the market needs to deal with is india might be buying russian oil at a $35 per barrel discount. how will that change things? dr. vakhshouri: that is a good point. india and china, major consumers and importers of energy at these prices that are very high. that is going to increase the export flow to these countries and other countries that are interested in discounts but volumes of imports with discounts to china and india would be larger, and we will see most of these will be traded in domestic russian currency, the ruble. it is going to actually work. dani: russia had backed down for

their demands are receiving payment in rubles. is this something that could ease pressures? europe could continue to supply themselves with energy from russia. dr. vakhshouri: the thing is, i would not say it is connected because if russia decides to accept the ruble as part of the currency, it is a mitigation for a new ascension and global sanctions on its financial system. some could argue it could make it easier for customers to purchase russian oil because it is traded in a currency other than the u.s. dollar in a system not using swift. going back to europe, there is no quick fix for european energy supplies. most of the countries announced they will reduce their oil and gas purchases from russia by the end of 2022.

none of them could start that immediately. it will take months to adjust the currency to find ways, maybe not by the end of march. it was mandated by the russian government it is something that could possibly happen by the end of the year. dani: as if that dynamic was not complicated enough for you, we have to wrap our heads around opec and the meeting today. the last meeting was 13 minutes long. what do you expect from the cartel? dr. vakhshouri: another easy meeting, because all the indicators show opec tries to maintain its integrity. they will stick to their plan and release what they were planning. it does not seem there will be much conflict in terms of increasing production. beyond that, we do not think

they will increase oil further than that because it is a stab in their own back. they will not show a green light to the market, they see no supply interruptions because it was mostly a volunteer import of russian oil. we think it will be easy and straightforward at the meeting. dani: can it continue to be an easy call from opec to not increase output? if oil continues to remain above $100 a barrel, is there some white where they have to cave -- is there some point where they have to cave to pressure? dr. vakhshouri: opec usually looks at the balance of fundamentals more than the prices. higher prices shows the fundamentals are in balance but as they look at how much is

going out of the market and how much they should release, what they indicated is demand will grow to pre-pandemic, 14 million barrels per day and slightly higher than pre-pandemic. what they see is according to schedule that they had, they will somehow fulfill the market need. if they increase production, to partially substitute russian oil, they are giving the indication to the market that other importers could easily stop importing russian oil, and they will not do that. they will stay away from politics is much as they can resist it. dani: thank you very much. that is dr. sara vakhshouri,

president / founder, svb energy international. coming up, ryanair ceo michael o'leary joins us from brussels. that interview is next. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe." i'm dani burger in london. let's get to the first word news. juliette saly is in singapore. juliette: the u.s. claims to have intelligence suggesting vladimir putin is being misinformed over the war in ukraine. advises to the russian president are said to be afraid to tell him the truth about the performance of his military. >> we believe putin is being

misinformed by his advisors about how badly the russian military is performing, and how the russian economy is being crippled by sanctions because the senior advisers are afraid to tell him the truth. juliette: germany says russia is backing office demand for gas payments in rubles. according to a german readout, chancellor schulz, european buyers could continue paying for gas and euros. the comment seem to be a de-escalation from moscow after the g7 refused to agree to the move. jamie dimon has received $56 million of jp morgan stock from an incentive program that the company valued at less than half that much three years ago. the bank ceo collected the shares last week from a performance award dating from january 2019. it is higher from last year's payment. apple and facebook parent meta provided consumer data to

hackers masquerading as law enforcement. the company supply details that included addresses and phone numbers and ip addresses. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani: thank you, juliette in singapore. the aviation summit that brings together europe's leading airline ceos is taking place in brussels today. it comes as the sector is facing multiple headwinds including volatile fuel prices and the war in ukraine, and a turbulent post-covid recovery. one of those in attendance is michael o'leary, ceo, ryanair. thank you for joining us today in the middle of this summit. we have to start with energy and

fuel prices. we have this announcement from the white house of sbr release of those reserves. oil prices are coming down. in the past you said you 80% hedged with fuel prices, but how much of a relief is it for you to see lower oil? michael: it is some relief to our customers. ryanair is 80% hedged until march 2023. we are in a strong position. it is not good for the industry or consumer confidence that we have escalating energy prices. we want to see an early conclusion to the unlawful invasion of ukraine. and much more stability in the energy price markets. dani: even if it does not hit your cost specifically, if the consumer feels the pain, they

are paying more at the pump. do you see that reflected in them less willing to buy tickets , less willing to go out and travel and spend that money? michael: the industry is still recovering from the covid pandemic. there appears to be pent-up demand for travel all over europe this summer. we believe the peak summer months will be strong. there is no doubt that the wider health of the economy will be damaged by high oil prices. the earlier the war in ukraine can be brought to a conclusion, and the sooner we return the energy markets is better for consumers and the industry in general. dani: i do not want to belabor

the point but i wonder if it impacts the consumer if you have this 20% not hedged, is there a level of oil you are looking at that is sustained and would impact margins in consumer demand? michael: we do not think so in the near term. believe the summer will be strong. if oil prices remain high, we think things could get scary next winter with rising energy demand. european economies will be undermined by higher oil prices. our concerns are over energy supply. we may be looking at undermined consumer confidence and the risk of a recession. we think this summer will be strong. we are well hedged at ryanair.

if there is a concern over consumer spending, it tends to favor the low cost airlines like ryanair. i would expect we would continue to grow strong. as an industry, we need a resolution of the ukrainian situation and more stable energy prices. dani: energy is not the only labor cost that has been an issue, and ryanair has faced its share of labor and union disputes. are you having to pay even more to attract talent? how do labor costs look at the moment? michael: we worked hard over the pandemic with our unions and colleagues. we had pay restraint in the airlines and agreed to modest pay cuts for pilots and cabin crew. we are restoring that pay, so there is a huge oversupply of pilots across europe.

there is a widely available pool of labor in the airline market. we are more concerned with disappointed airports, we are seeing airport struggle in security and airport handling the lower pay jobs. we are seeing pain points at a number of airports, berlin, dublin, issues at the latest security cues. our focus will be on those that make the travel experience across europe this summer. dani: earlier in the month you pledged to airlift medical supplies bound for ukraine. how is that going? michael: with the larger airlines flying into poland and the neighboring states to ukraine, over the last four

weeks we have run 20 humanitarian flights, giving the whole space of our aircraft free of charge for emergency equipment and humanitarian relief supplies. we are flying that free of charge into the airports. we look to create low-fare availability for people seeking other points in poland, slovakia, romania. we are doing everything we can as an airline to help facilitate. we are committed to returning to ukraine soon as possible. we are doing everything we can for humanitarian assistance and low fares for ukrainian refugees. dani: you have faced accusations of hiking fares between poland and ukraine. you have denied those accusations.

you say you are providing low-cost flights. i want to give you a chance to comment on that. michael: what actually happened, we had refugees who turned up on the first days of the invasion, and we had full flights already, heavily booked and sold out. we have been creating additional seats. we are providing a weekly update of where we have low-fare availability over the next seven days. there was absolutely zero truth, it was an internet story, that we were increasing prices for refugees. it never happened, completely untrue. dani: thank you for clearing that up. i also want to get your thoughts on boeing. last year you could not agree for a price on the higher capacity max 10. have you restarted talks?

michael: no, we are not in talks with boeing for new aircraft. we are working closely with our partners, taking 65 aircraft deliveries over the last five months. those will be delivered to us in april and may. that gives us 65 new aircraft this summer. we expect to grow this year with 50% more passengers than we had pre-covid. we will take 55 more aircraft next winter from boeing. passengers love the new aircraft. we have yet to restart talks with boeing. boeing is dealing with multiple issues. we will resume talks when there is a pricing point for us. dani: thank you for joining us,

michael o'leary, ceo, ryanair. that is that for us at "daybreak: europe." bloomberg markets: europe is up next, anna and mark will walk you through that. this is bloomberg. ♪ so many people are overweight now,

and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now there's release from golo. it naturally helps reverse insulin resistance, stops sugar cravings, and releases stubborn fat all while controlling stress and emotional eating. at last, a diet pill that actually works. go to golo.com to get yours. anna: good morning a welcome to

"bloomberg markets: europe." i'm anna edwards in london. mark edwards joins us from singapore to take us through the market action. the cash trade is less than one hour away. turning on the taps, crew tumbles as the white house weighs a massive release of reserves to battle rising energy prices. russia offers oil to india at a steep discount.