India plans to keep buying cheap Russian oil, says official

India’s Procurement of Russian Oil Amidst Sanctions

India’s oil minister, Hardeep Singh Puri, has expressed the country’s intention to continue purchasing oil from Russian companies authorized to make sales. India’s stance is driven by the low prices of Russian crude, resulting from the price caps imposed by Western sanctions due to Russia’s ongoing invasion of Ukraine. “If an entity is not under sanctions, there is no question I will buy from the cheapest supplier,” Puri stated. He emphasized that India is not alone in procuring from Russia, as European countries and Japanese firms are also engaging in such transactions.

India’s Energy Consumption and Refining Capacity

India ranks among the world’s largest energy consumers, relying on imports for 88% of its oil requirements. Anticipating a surge in energy demand, Puri expects increased utilization of natural gas and renewable sources. The country’s refining capacity currently stands at 252 million metric tons annually, equivalent to 5.04 million barrels per day (bpd). India aims to expand this capacity to 300 million metric tons (6 million bpd) and is considering further expansion to 400 or 450 million tons.

Natural Gas Adoption and Investments

While India aspires to increase its natural gas consumption to 15% of its energy mix by 2030 from the current level of 6%, the speed of adoption remains contingent upon price fluctuations. The recent spike in global gas prices following Russia’s invasion of Ukraine has hindered the country’s gas transition. Puri acknowledged that a decrease in gas prices would lead to an increase in its share of India’s energy mix. Indian state and private companies continue to invest in liquefied natural gas projects globally, including discussions with Guyana, which holds substantial recoverable oil equivalent resources.

India’s Exploration Ventures

India’s exploration efforts extend to the global arena, with Puri disclosing talks with the world’s five largest oil and gas companies regarding potential hydrocarbon exploration collaborations in India. This move aligns with India’s long-term energy security strategy, which includes diversifying its supply base and enhancing domestic production capabilities.