India warns global crude oil prices would rise if it stops Russian imports

India on Wednesday warned that if it were to pull back on purchasing Russian crude oil, international prices would rise and lead to further volatility and instability.

“If suddenly, now, as a huge importer of crude oil, India pulls back on its diversified sources, concentrating on the remaining, in an already constrained market, it will lead to further volatility and instability, jacking up international prices,” a statement issued by the Press Information Bureau (PIB) said.

The statement rebuts recent reports on the purchase of crude oil by Indian oil companies from Russia and claims that such reports are “a part of a pre-meditated attempt to further destabilize an already fragile global oil market”.

The statement also points out that India’s energy needs are enormous with daily consumption of around 5 million barrels and a refining capacity of 250 MMTPA. “Indian energy companies buy from all major oil producers in the world. On an average, India has the unique distinction of servicing 60 million visitors at its petrol pumps every single day. Despite challenging times, it is important for the government to ensure access to affordable energy to our citizen”, it said.

“Our top 10 import destinations are mostly from West Asia. In the recent past, USA has become a major crude oil source for India, supplying almost $13 billion worth of energy imports, with almost 7.3 per cent of market share of crude oil imports” it said, adding that the India has been constrained to pay ever increasing prices charged by certain oil suppliers, which is leading the country to diversify its sources of procurement. “Meanwhile, energy demand in India remains inelastic. At the current price levels, many countries in the immediate neighbourhood are facing severe fuel shortages and chaos due to high fuel inflation”, it added.

Indian energy companies have been sourcing energy supplies from Russia, on a sustained basis, over past several years. Yearly figures may have varied due to variety of reasons, including operational necessities, the statement said, adding that energy purchases from Russia remain miniscule in comparison to India’s total consumption.

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