Sources indicate that global crude prices could potentially surge to $200 per barrel if India were to halt its purchases of Russian oil. This scenario would have significant negative consequences for consumers worldwide. It's important to note that Russian oil has not been sanctioned by either the United States or the European Union.
India's energy security policy is shaped by its position as the world's third-largest energy consumer, with a heavy reliance on imports. Russia, the second-largest crude oil producer globally, accounts for approximately 10% of global demand. It is also a major exporter of both crude and refined products. Concerns about the potential disruption of Russian oil supplies in the past led to a peak in Brent crude prices, reaching $137 per barrel in March 2022.
India has strategically adapted its sourcing to secure affordable energy while adhering to international norms. Recent reports suggested that Indian state-run refiners had suspended purchases of Russian oil. However, sources have clarified that Indian refiners have continued to buy Russian crude based on commercial viability.
The G7/EU price-cap mechanism aims to limit Russian revenues while maintaining global supplies. Indian oil refiners' purchases have remained legitimate under international frameworks. Without the absorption of discounted Russian crude by Indian refiners, coupled with production cuts by OPEC+, global oil prices could have risen even further, exacerbating global inflation.
Indian oil marketing companies have avoided purchasing sanctioned Iranian or Venezuelan crude and have complied with the US-recommended price cap for Russian oil. The European Union has recently proposed a lower price cap for Russian oil. The EU remains a significant importer of Russian energy, particularly liquefied natural gas and pipeline gas.
India's energy choices are driven by its national interest, while also contributing to global energy stability. India's approach has helped to maintain oil flow, stabilize prices, and balance markets, all while respecting international frameworks.
5 Comments
Donatello
Profiting from discounted Russian oil is morally questionable, especially when it's contributing to human suffering in Ukraine.
Raphael
India is a responsible player on the global stage, balancing its own needs with respecting international norms. This article proves that case.
Michelangelo
India is navigating a difficult situation with a focus on affordable energy for its population. A pragmatic and responsible approach.
eliphas
This article highlights the realities of energy security. India is looking out for its people first, and that's perfectly understandable.
paracelsus
The argument of 'energy security' is often a thinly veiled excuse for self-interest. Other countries are suffering due to the actions of Russia.