New Delhi: India on Thursday played down the threat of the US imposing sanctions on countries buying Russian oil, saying it is confident of meeting its needs from alternative sources.
Oil Minister Hardeep Singh Puri said the world’s third largest oil importer should be able to deal with any problems with Russian imports by seeking supplies from other countries.
India imports more than 85 per cent of its requirement of crude oil, which is turned into fuels like petrol and diesel in refineries.
Traditionally, the Middle East was the main source, but Russia has been the mainstay supplier for nearly three years now.
After much of the West shunned Russian crude following Moscow’s invasion of Ukraine in February 2022, Russia began offering steep discounts to attract alternative buyers.
Indian refiners seized the opportunity, turning Russia, once a marginal supplier, into India’s largest source of crude oil, overtaking traditional suppliers from West Asia. Russia now accounts for as much as 40 per cent of India’s oil imports.
Speaking at the Urja Varta annual conference of the Directorate General of Hydrocarbons (DGH), Puri said there are many new suppliers coming onto the market such as Guyana and supplies can also be ramped up from existing producers such as Brazil and Canada.
“I don’t feel any pressure in my mind. India has diversified the sources of supply,” he said in reply to a question on the impact of the US threatening Russia with sanctions.
Earlier this week, US President Donald Trump had threatened that countries purchasing Russian exports could face sanctions or steep tariffs if Moscow fails to reach a peace agreement with Ukraine within 50 days.
Puri said India is also increasing the hunt for finding new deposits of oil within the country and quickly bringing them to production.
“I’m not worried at all. If something happens, we’ll deal with it,” he said. “India has diversified the sources of supply and we have gone, I think, from about 27 countries that we used to buy from to about 40 countries now.”
In the event of Russian supplies being hit, Indian Oil Corp chairman A S Sahney said the country could “go back to the same template (of supplies) as was used pre-Ukraine crisis when Russian supplies to India were below 2 per cent.”
The Oil Minister said prior to February 2022, India was buying 0.2 per cent of overall crude oil from Russia. “Today… It has gone up considerably,” he said.
Addressing a press conference, Puri said at present the market does not react to geopolitical turmoil, especially in terms of prices as much as there is good availability of oil.
Addressing a press conference, he said at present, the price of crude oil is around USD 68.5 per barrel and it is expected to remain around the same levels in the months to come. “I think it will be somewhere around USD 65/barrel,” he said.
Puri also said that there are discussions and consultations underway with industry stakeholders led by NITI Aayog to increase the percentage of ethanol blending from 20 per cent at present.
This was one of the initiatives that we have been talking about for sometime called “stratigraphic wells”. This is the first of the series which will be carried out. “ONGC has taken the leap to tie up with BP in terms of well design, well location, understanding geology etc,” he said.
“ONGC will be putting in money, BP will provide expertise,” he said, adding that the two entities are looking to work together in Andaman, Mahanadi, Saurashtra Kutch.
