India isn’t overly dependent on anyone for oil — not even Russia, India’s Minister of Petroleum and Natural Gas told CNBC, adding that his country has diversified its sources.
“India doesn’t get over dependent on anyone,” Hardeep Singh Puri told CNBC’s Tanvir Gill when asked if his country was too dependent on the Kremlin.
Since Russia’s invasion of Ukraine in February last year, India’s refiners have been snapping up discounted Russian oil. Moscow has since leapfrogged to become India’s leading source of crude oil, accounting for about 40% of India’s crude imports.
Asked if India was getting a $15 or $30 discount per barrel on Russian crude, Puri said: “Yes, there have been discounts. But there have been discounts coming from all over.”
“If there’s a 30% discount, the Russians are putting a ribbon around it and sending it to us free. That’s what it means,” Puri said.
India has also been buying more from countries in the Middle East, such as Iraq, he added.
“We’re diversified. We used to buy from 27 sources — today we are buying from 39 sources,” he said, naming suppliers from Saudi Arabia, the UAE, and Kuwait amongst them.
According to data from S&P Global in July, India’s crude oil sources come largely from Middle East and Russia.
Oil prices have risen 12% off their lows in June to hover at around $79 levels per barrel currently.
“Sometimes high oil prices can become a self fulfilling prophecy in terms of resulting in meeting of immediate and short term needs,” Puri said, elaborating that in world roiled by economic pressures, stimulus packages drive up inflation.
That said, there is also sufficient oil supply in the world, the Indian oil minister said.
“There is enough oil available in the world. What you should be really worrying about is whether the consumer will have the resources or the money to pay for it,” Puri noted, highlighting that’s the “real problem” that many countries face.
In an August report, the International Energy Agency forecast global oil demand will hit record-highs.
“World oil demand is scaling record highs, boosted by strong summer air travel, increased oil use in power generation and surging Chinese petrochemical activity,” the agency said.