India promised to evaluate the proposal of the G7 countries on the introduction of a price ceiling for Russian oil. Indian Oil and Gas Minister Singh Puri spoke about this in an interview with the American television channel CNBC, who noted that any decision would be difficult due to many factors.
The minister explained that the domestic market and consumption in India are primarily important for him. He also noted that the global economy did not have time to recover from the consequences of the coronavirus, and the war in Ukraine creates new risks, so India will make decisions that affect the country's energy security, carefully and without haste.
"What does this offer mean? We will consider it very carefully and cautiously,” Singh Puri said, commenting on the prospects for India to join the capping mechanism for Russian oil.
Puri also noted that India is closely monitoring which countries will agree to join the G7 initiative, and this may influence New Delhi's decision. The Indian authorities do not want to rush into a decision and intend to assess all possible risks and prospects.
“I have a moral obligation to my consumers. I have already told Europe that they buy more oil in a day than we do in a whole quarter. Therefore, we will buy oil in Russia or anywhere else,” the minister said.
In March, oil supplies from Russia accounted for just 0.2% of India's total imports, Puri said, with the bulk coming from Iraq, Saudi Arabia, Kuwait and the United Arab Emirates. India consumes about 5 million barrels of oil per day, the minister said, noting that he has no qualms buying oil from Russia.
“No, there is no conflict. I have a moral duty to my consumer. As part of a democratically elected government, I do not want to allow an energy crisis. Look at what is happening in the countries around India,” Singh said, clearly referring to neighboring Sri Lanka, where the government was forced to resign due to the energy crisis.
After the start of the war in Ukraine, India and China became the main buyers of Russian oil on international markets. Europe has decided to abandon Russian oil, and from December an oil embargo will work, which should reduce consumption even more. Russia sells its oil at deep discounts, which attracts China and India – at the peak, discounts reached 30%.
Western countries are dissatisfied with Russia's oil and gas revenues remaining at a high level and intend to reduce them by introducing a price cap mechanism. The implementation of the plan involves the use of the tanker insurance market, which is almost completely controlled by companies from the US, UK, Switzerland and the EU. Insurance companies will be prohibited from insuring tankers with Russian oil if the cost of oil in the contract exceeds the limit value. The very limiting price of the country has not yet been called.
