No one asked India to stop buying oil from Russia, says Puri in US

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Washington: India, the world’s third-largest oil importer and consumer, will continue to buy oil from any country, Oil Minister Hardeep Singh Puri has said, saying no country told New Delhi to stop buying oil. buy oil from Russia.

India, which has not publicly condemned Moscow for its “special military action” in Ukraine, has become Russia’s second largest buyer of oil after China as Western buyers have stopped trading with the country and its oil prices. oil fell.

Puri, who is here for talks with US officials on clean energy, said the government has a moral duty to provide energy at affordable rates to consumers.

“India will buy oil wherever it has to for the simple reason that this kind of discussion cannot be taken to the consuming population of India,” he told a group of Indian reporters here. “Did someone tell me to stop buying Russian oil? The answer is an emphatic “no”. »

He also said he was confident that India would be able to mitigate a two million barrels per day production cut by the OPEC oil producer cartel and its allies, known as OPEC+.

“If you are clear on your policy, meaning you believe in energy security and energy affordability, you will buy wherever you need to buy energy from sources,” Puri said afterward. his bilateral meeting with US Secretary of Energy Jennifer Granholm.

With imports covering 85% of its oil needs, India has diversified its sources of oil purchases. Its refiners bought discounted Russian oil that had been shunned by some Western buyers during Moscow’s invasion of Ukraine in February.

While accounting for just 0.2% of all imported oil, Russia is now India’s second-largest oil supplier after Iraq, accounting for around 18% of all oil purchased.

At one point, Russian Urals crude was more than $30 a barrel cheaper than Brent crude (the global benchmark). At the end of September, it was around 20 USD a barrel cheaper.

The Indian government, which defends its purchases from Russia on the grounds that it must source where it is cheapest, has so far shown no intention of joining a plan by the group of nations of the US-led G7 to cap the price of oil purchased from Russia as a way to limit Moscow’s revenue.

On the OPEC+ production cut that reversed the downward trend in international oil prices, Puri said it was producers’ sovereign right to decide on production.

“India is not part of OPEC. India is the target of OPEC decisions,” he said in response to a question.

“I’ve always been of the view (that) it’s their sovereign right to decide what they want to do, how much oil they want to produce and how much they want to put on the market. But I always say it’s all subject to the doctrine of intended and unintended consequences,” he said.

India, as one of the major consumers of oil and gas, also has a say in the global oil market, he said.

“That’s why I’m deliberately showing not only calm but also restraint in commenting on what happened, because I’m told there were assurances given, don’t ask me who, etc. ., which in fact they were not planning to do,” the minister said.

Puri said oil producers told India last year “that this (production adjustment) was a temporary adjustment and what you would see is that in February the amount of crude that is put on the market would be sufficient to meet the growing demand.”

“Obviously, starting in March 2020, when the global economy was in a state of virtual lockdown, there was a calibrated opening. But now most economies are running slowly on all cylinders, and there is therefore an increase in demand,” he said.

“But the fact is that large parts of the world today are either in recession or experiencing conditions (like) recession,” he said.

Observing that OPEC’s decisions have been widely commented on, both here and in other parts of the world, he said: “How much of the proposed 2 million barrels that have been cut will absorb less production sooner and how much will be new cuts is something that will be very carefully considered.

“The market was already gearing up to cut a million barrels. So the announcement of a two million barrel cut has taken large parts of the world by surprise and questions arise because it stands to reason that if there is a large shortfall in the amounts of energy that are rejected in the market world, then the prices will go up,” the minister said.

And the rise in prices would in turn aggravate the movement towards recession which, in turn, would lead to a loss of demand. “So it becomes a vicious cycle,” he said.

“Whether that was fully considered or not, it’s not for me to comment on the decision that was made. But I believe that all decisions that are made that have global ramifications have consequences both intentional and unintentional. How that plays out, we’ll see.

During his meeting with the US authorities, Puri raised the idea of ​​an India-US Green Corridor, which he said drew a positive response from his US counterpart.

“The turmoil in the energy markets, and I use the word turmoil support with care, will not bring India to the resolve to switch to green, clean and sustainable energy,” he said. declared.

The two countries will now focus on the broader contours of this ambitious Green Energy Corridor.

India’s imports from the United States are booming and are currently buying $20 billion worth of energy from the United States. There are talks of buying more from the United States, he said.

While work on green energy would continue, traditional exploration and production of oil and gas would also continue, he noted.

The world is also making progress on green hydrogen. India and the United States have an advantage that is not currently materializing, he added.

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