India to review Russian oil price cap

Indian Petroleum Minister Shri Hardeep Singh Puri on Monday said the country will carefully assess whether to support 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 told CNBC’s Hadley Gamble at Gastech 2022 in Milan, Italy.

Puri said the world economy was still adjusting to the impact of the coronavirus pandemic and Russia’s invasion of Ukraine.

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

Puri added that it was still unclear which countries would take part in the proposed price cap on Russian oil and what the possible implications could mean for energy markets.

Finance ministers representing the G-7 countries 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 ability to fund its onslaught in Ukraine and better protect consumers amid soaring energy prices.

Energy analysts have been highly skeptical about the integrity of the proposal, however, warning that the policy could backfire if key consumers such as China and India are not involved.

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

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

Russia accounted

for just 0.2% of India’s oil imports at the end of March, Puri said, noting that some criticized India for increasing its supply 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 said.

Source: CNBC