Livemint | G-7 price cap on Russian oil will not affect India: Hardeep Puri

Dec 05,2022

As the price cap on Russian seaborne crude oil comes into effect on Monday, union minister for petroleum and natural gas Hardeep Singh Puri has said that the move will not affect India as the country’s exposure to Russian oil is not significant.

In an interview to BQPrime, Puri said that Russia is not the top supplier of the oil to the country, while Saudi Arabia, Iraq and UAE are the traditional major suppliers of crude.

“I would say that India does not fear that the West’s proposed price cap could constrain shipping and impede the flow of Russian oil. I have no anxiety about that, and I am sure the market will deal with it," he said during the interview.

The minister, however, noted that in case Russia lowers its supplies and refuses to sell at the capped price, then the global supplies would be impacted, and may cause a surge in international prices.

Supply concerns due to the price cap and the decision of OPEC+ to stick to its output cut decision taken in October, lifted international oil prices on Monday. At 7.22 pm, the February contract of Brent on the Intercontinental Exchange was trading at $88.17 per barrel, higher by 3.04% from its previous close.

On 3 December, Mint reported that India will continue to import crude oil from all sources, including Russia.

Noting that the oil trade has all options available for moving crude from one country to another, a top government official said that global suppliers have assured India of uninterrupted oil supplies. “We will continue to buy from wherever we need to buy, including Russia. India has been assured by global oil suppliers that there will be no disruption in supplies,“ the official said.

The price cap gains significance for India as Russia has emerged as one of the major sources of crude oil this year, despite traditionally not supplying a significant quanity of oil.

According to data from S&P Global Commodity Insights, India’s appetite for Russian crudes in October rose to levels unprecedented levels and surpassed volumes shipped by leading Middle Eastern suppliers.

“From a market share of less than 1% in India’s import basket before the start of the Russia-Ukraine conflict, Russia’s share of India’s imports rose to 4.24 million mt, or nearly 1 million b/d, in October, taking a 21% share comparable to that of Iraq and higher than Saudi Arabia’s share of around 15% in the country’s import basket in the same month,“ said a recent S&P Global report.