India says it will look carefully at Russian oil price cap

Oil pumping jacks function in an oilfield close to Almetyevsk, Tatarstan, Russia, on Wednesday, March 11, 2020.

Andrey Rudakov | Bloomberg | Getty Images

Indian Petroleum Minister Shri Hardeep Singh Puri on Monday stated the nation will carefully assess whether or not to assist a G-7 proposal to impose a cap on the price of Russian oil.

“There are many conversations going on due to a large number of factors,” Puri advised CNBC’s Hadley Gamble at Gastech 2022 in Milan, Italy.

Asked whether or not India would signal as much as the G-7 proposal to place a price cap on Russian oil, Puri stated the world financial system was nonetheless adjusting to the influence of the coronavirus pandemic and Russia’s invasion of Ukraine.

“Now, what will the proposal mean? We will look at it very carefully,” he stated.

Puri added that it was nonetheless unclear which nations would participate within the proposed price cap on Russian oil and what the doable implications might imply for vitality markets.

Finance ministers representing the G-7 nations on Friday agreed on a plan to implement a price-capping mechanism for Russian oil exports.

The initiative is designed to curtail the Kremlin’s potential to fund its onslaught in Ukraine and higher defend shoppers amid hovering vitality costs.

Energy analysts have been extremely skeptical concerning the integrity of the proposal, nonetheless, warning that the coverage might backfire if key shoppers corresponding to China and India aren’t concerned.

‘I’ve an ethical obligation to my client’

China and India have elevated their purchases of Russian oil following the Kremlin’s invasion of Ukraine, benefiting from discounted charges.

Puri stated India consumes round 5 million barrels of oil per day and this largely comes from Iraq, Saudi Arabia, Kuwait and the United Arab Emirates.

Russia accounted for simply 0.2% of India’s oil imports at the tip of March, Puri stated, noting that some criticized India for rising its provide of Russian oil following the Kremlin’s invasion.

“I said the Europeans buy more in one afternoon than I do in a quarter. I’d be surprised if that is not the condition still. But yes we will buy from Russia, we will buy from wherever,” Puri stated.

Asked whether or not he had an ethical battle with shopping for Russian oil amid the Kremlin’s onslaught in Ukraine, Puri replied, “No, there’s no conflict. I have a moral duty to my consumer. Do I as a democratically elected government want a situation where the petrol pump runs dry? Look at what is happening in countries around India.”

The EU has known as on China and India to participate within the G-7 initiative to cut back the income that Russia makes from promoting oil.

Europe’s Energy Commissioner Kadri Simson advised CNBC’s Silvia Amaro on Saturday that China and India “are willing to buy Russian oil products while excusing themselves that this is important for their security of supply. But it is unfair to pay excess revenues to Russia.”

It shouldn’t be but clear how the G-7 will implement its price-capping plan. The particulars are anticipated to be ironed out earlier than early December when EU sanctions on seaborne imports of Russian crude kick in.

The G-7 is comprised of the U.S., Canada, France, Germany, Italy, the U.Ok. and Japan.

Russia on Monday vowed to take retaliatory measures over the proposal and says it will cease promoting oil to nations that impose price caps on Russian vitality exports.

French Finance Minister Bruno Le Maire advised CNBC on Saturday that efforts to introduce a price cap on Russian oil require a broad worldwide dedication to achieve success.

Rather than a Western-only measure, Le Maire stated the initiative ought to be applied as a “global measure against war.”

— CNBC’s Silvia Amaro contributed to this report.

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