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India isn’t over-dependent on Russian oil, says energy minister

BusinessIndia isn't over-dependent on Russian oil, says energy minister

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Pedestrians walk past an oil refinery, operated by Bharat Petroleum Corp. Ltd., in Mumbai, India.

Bloomberg | Bloomberg | Getty Images

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.

Sometimes high oil prices can become a self fulfilling prophecy in terms of resulting in meeting of immediate and short term needs.

Hardeep Singh Puri

India’s Minister of Petroleum and Natural Gas

India is the world’s third largest energy importer, and purchases more than 80% of its crude oil from international markets.

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.

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.

Oil prices have risen 12% off their lows in June to hover at around $79 levels per barrel currently.

Global benchmark Brent traded 0.35% higher at $83.65 a barrel Friday, while the U.S. West Texas Intermediate futures climbed 0.38% to $79.35 per barrel.

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Brent vs. West Texas Intermediate futures

“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.

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