NEW DELHI: petroleum minister Hardeep Singh Puri on Wednesday alluded to India’s shift towards Russia after traditional suppliers such as Saudi Arabia and Iraq started “charging a premium” for crude oil supplies to Asian markets.
In an interview to Reuters on the sidelines of the World Economic Forum in the Swiss ski resort of Davos, Puri said that costly shipments from conventional Middle East suppliers forced India to diversify its crude sources.
“Iraq followed Saudi Arabia in charging a premium for oil supplies to Asian markets which turned their crude more expensive than crude sourced elsewhere,” the minister said, underscoring India is now buying from 37 countries up from 29 earlier.
Saudi Aramco, the national oil giant, this month cut the price of its flagship Arab Light crude to Asian market to the lowest level in 27 months.
“I didn’t ask them to reduce it but they did it because they also wanted to. If you see the Indian figures in the past 2-4 years, some of the major suppliers suddenly became number three and somebody who had only 0.2% (import share) gone up,” Puri added.
Puri was referring India stepping up oil imports from Russia, which offered heavy discounts on crude after its invasion of Ukraine.
Before the invasion, Russia hardly accounted for 0.2% of India’s oil imports.
Iraq had overtook Saudi Arabia as the top oil supplier to India a few years ago. Now, cheaper crude supply from Russia in the aftermath of Western sanctions for its invasion has pushed it to the top spot followed by Iraq and Saudi Arabia.
India is the world’s third-largest buyer and consumer of oil, and imports nearly 80 per cent of its needs.
In the 10 months after Russia invaded Ukraine, India saved $3.6 billion by importing heavily discounted crude from Russiat.
Push for green energy
Puri said that supply cuts by OPEC+, steep oil prices from crucial suppliers and geopolitical tension is also pushing India to heat up its energy transition.
Puri said that while OPEC+ nations have a right to oversee their energy production, supply cuts against such uncertainty, and the causing adverse impact on global prices, will hit long term demand.
It is “imperative” for India to speed up its transition to green energy in this scenario, he told Reuters.
Puri said that he is also asking companies in Davos who are interested to invest in India and with whom he would like Indian oil companies to partner with to explore acquisitions and assets in regions such as Latin America.
Puri said countries, such as in the Middle East, had told him they want to buy Indian oil companies outright, he said, however they are strategic and not for sale.
(With inputs from Reuters)