India says it will look closely at Russia’s oil price ceiling
Oil pump jacks work at an oil field near Almetyevsk, Tatarstan, Russia, on Wednesday, March 11, 2020.
Andrey Rudakov | Bloomberg | beautiful pictures
On Monday, Indian Oil Minister Shri Hardeep Singh Puri said the country would carefully assess whether it supported the G-7 proposal to impose a cap on Russian oil prices.
“There’s a lot of conversation going on due to a huge number of factors,” Puri told CNBC’s Hadley Gamble at Gastech 2022 in Milan, Italy.
Asked if India would subscribe to the G-7 proposal for a price cap on Russian oil, Mr. Puri said the world economy is still adjusting to combat the impact of the coronavirus pandemic. and the Russian invasion of Ukraine.
“Now, what will the proposal mean? We will look at it very carefully,” he said.
Puri added that it is not yet clear which countries will participate in the proposed price cap for Russian oil and the possible effects on the energy market.
Finance ministers representing G-7 countries on Friday agreed on a plan to implement a price-limiting mechanism for Russian oil exports.
The initiative is designed to limit the Kremlin’s ability to finance Ukraine and better protect consumers amid soaring energy prices.
However, energy analysts cast doubt on the integrity of the proposal, warning that the policy could backfire if key consumers such as China and India do not participation.
‘I have a moral obligation to my consumers’
China and India increased their purchases of Russian oil after the Kremlin’s invasion of Ukraine, benefiting from discounted interest rates.
Puri said India consumes about 5 million barrels of oil per day and this oil comes mainly from Iraq, Saudi Arabia, Kuwait and the United Arab Emirates.
Puri said Russia accounted for only 0.2 percent of India’s oil imports at the end of March, noting that some criticized India for increasing Russian oil supplies following the Kremlin’s invasion.
“I’ve been told that Europeans buy more in an afternoon than I do in a quarter. I’d be surprised if that didn’t happen. But yeah, we’ll buy from Russia, we’ll buy from anyone. anywhere,” Puri said.
When asked if he had a moral conflict with buying Russian oil amid the Kremlin’s onslaught in Ukraine, Puri replied: “No, there is no conflict. I have a moral obligation to it. with my consumers I as a democratically elected government want a situation where the pump gasoline runs dry Let’s see what’s going on in countries around India. “
EU has calls on China and India to join the G-7 . initiative to reduce the profits Russia makes from selling oil.
European Energy Commissioner Kadri Simson told CNBC’s Silvia Amaro on Saturday that China and India are “ready to buy Russian oil products while defending that this is important for the security of our supply.” But it wouldn’t be fair to pay excess revenues to Russia.”
It remains unclear how the G-7 will implement the price cap plan. Details are expected to be finalized before early December when EU sanctions on Russian crude oil imports by sea come into effect.
The G-7 includes the US, Canada, France, Germany, Italy, the UK and Japan.
On Monday, Russia announced it would take retaliatory measures over the proposal and said it would stop selling oil to countries that impose price caps on Russian energy exports.
French Finance Minister Bruno Le Maire told CNBC on Saturday that Russia’s efforts to put a ceiling on oil prices require broad international commitment to be successful.
Instead of a Western-only measure, Le Maire says the initiative should be taken as a “global measures against war.“
– Silvia Amaro of CNBC contributed to this report.