India is prepared to reduce its oil purchases from Russia, but in return, it has stipulated that the US must allow it to buy oil from Iran and Venezuela. India is trying to balance its energy needs in light of US tariffs and global energy security.
Reduce Russian Oil Purchase: According to a Bloomberg report, India has made it clear to the US that if it reduces oil imports from Russia, the US must permit it to purchase oil from Iran and Venezuela. Both these countries are major oil suppliers, but the US has imposed sanctions on them. India argues that simultaneously stopping oil purchases from Russia, Iran, and Venezuela could lead to a rise in global oil prices.
A source stated that an Indian delegation, which visited the US this week, reiterated this point in a meeting with American officials. Indian officials said that a sudden ban on oil purchases would affect India's energy security. Spokespersons for the Ministries of Commerce and Oil, as well as the US Embassy, have not commented on the matter.
Condition Set for US
According to a Bloomberg report, India has made it clear to the US that if it reduces oil imports from Russia, the US must permit it to purchase oil from Iran and Venezuela. Both these countries are major oil suppliers, but the US has imposed sanctions on them. India argues that simultaneously stopping oil purchases from Russia, Iran, and Venezuela could lead to a rise in global oil prices.
A source stated that an Indian delegation, which visited the US this week, reiterated this point in a meeting with American officials. Indian officials said that a sudden ban on oil purchases would affect India's energy security. Spokespersons for the Ministries of Commerce and Oil, as well as the US Embassy, have not commented on the matter.
Status of Oil from Russia
India continues to buy oil from Russia, although the volume has somewhat decreased. Russia remains India's largest oil supplier. Commerce Minister Piyush Goyal recently stated that India is interested in increasing its oil and gas purchases from the United States. He said in New York that the US can play a crucial role in India's energy security goals.
Due to the Ukraine war, many countries stopped trading with Russia, forcing Russia to offer significant discounts on its oil. India imports approximately 90 percent of its oil requirements. Cheap Russian oil has helped India reduce its oil bill. Oil from Iran and Venezuela is also comparatively cheaper. India stopped buying oil from Iran in 2019, and Reliance Industries halted oil purchases from Venezuela in the same year.
US Oil and India's Alternative
Indian companies could increase oil purchases from the Middle East, but this would raise India's import bill. In July, Indian companies paid an average of $68.90 per barrel for Russian oil. In contrast, Saudi Arabian oil was $77.50 and US oil was $74.20 per barrel. Indian tankers are the largest customer for oil coming from Russia, while China is number one overall.
India's Strategy
India's strategy, which proposes that in exchange for reducing oil purchases from Russia, the US should allow it to buy oil from Iran and Venezuela, is considered a balanced move. This would enable India to maintain its energy security and attempt to reduce US tariffs on Russian oil purchases. Additionally, it could stabilize India's position in the global oil market.
Impact on Global Oil Market
India's condition is also significant for the global oil market. If India reduces oil imports from Russia and the US grants permission for purchases from Iran and Venezuela, oil supply will be affected, and price fluctuations could be observed. This move by India is not only aimed at reducing its energy bill but is also crucial for maintaining stability in the global market.
