India’s ongoing crude oil imports from Russia have contributed to global energy price stability, according to Petroleum and Natural Gas Minister Hardeep Puri. He has said that discontinuing Russian oil trade would have caused crude prices to surge beyond $120-130 per barrel.Following the Russia-Ukraine conflict, whilst the US and Western countries enforced restrictions on Moscow, India maintained its oil procurement from Russia. In fact, India stepped up imports of crude oil from Russia.
Oil Prices At $130 per barrel?
- According to an ANI report, Puri highlighted Russia’s significant role as a major crude oil producer, with an output exceeding 9 million barrels daily.
- He explained that a sudden removal of 9 million barrels from the global supply of approximately 97 million barrels would have necessitated an unfeasible worldwide consumption reduction of over 10%.
- Such a disruption would have resulted in oil prices escalating beyond $120-130 per barrel, as consumers worldwide would have competed for limited supplies, he claimed.
- “Imagine the chaos if this oil, amounting to about 10% of the global oil supply of around 97 million, vanished from the market,” he said in Vienna.
- He further elaborated, “It would have forced the world to reduce its consumption, and since the consumers would be chasing the reduced supplies, the prices would’ve spiralled to over $120-130.”
The international community imposed a price ceiling on Russian oil rather than implementing comprehensive sanctions.“Russian oil was never under global sanctions. Sensible decision makers around the world were aware of the realities of global oil supply chains and how India was only helping the global markets by buying discounted oil under a price cap from wherever we could,” he said, praising India’s role in navigating the energy crisis.Also Read | India laps up discounted crude: RIL, Nayara Energy get big chunk of Russia’s flagship oil exports; Reliance world’s single biggest buyer of UralsAddressing critics of India’s Russian oil imports, Puri noted that certain commentators make unwarranted criticisms of Indian policies without properly understanding energy market operations.Currently, India depends on imports for 80 per cent of its oil requirements and 50 per cent of its natural gas consumption. To fulfil its energy demands, India has diversified its sources by procuring oil and gas from numerous international suppliers.India is actively expanding its conventional fossil fuel energy production, with recent focus on the Andaman region for exploration. As the world’s third-largest consumer of energy, India requires approximately 5.4 million barrels of oil daily.
