Concerns regarding the global energy supply have resurfaced. The United States has issued a stern warning to Russia, stating that if it does not engage in peace talks with Ukraine within the next 50 days, further economic sanctions could be imposed. The US is particularly focused on countries that are purchasing large quantities of crude oil from Russia.
India, which has become the largest importer of Russian crude oil, is under scrutiny following this warning from the United States. Russia now accounts for approximately 35 percent of India's total oil supply.
Will India be affected?
During an event in New Delhi, Union Petroleum Minister Hardeep Singh Puri responded to this issue, stating that he is not particularly concerned. According to him, if the supply of oil from Russia is disrupted, India has existing options to increase supply from other countries.
He also mentioned that India currently imports oil from 40 different countries. Therefore, if there is a disruption from one source, the needs can be met by purchasing oil from other countries.
Russia has become India's largest supplier
After the Russia-Ukraine war, when Western countries imposed sanctions on Russia, India seized the opportunity to start buying crude oil from there at cheaper rates. Gradually, India increased imports from Russia, and now it has become the largest country supplying oil to India. Approximately 35 percent of India's total crude oil imports now come from Russia alone.
Following Russia, countries like Iraq, Saudi Arabia, and the UAE traditionally supply oil to India.
Volatility in oil prices
Amidst the US warning and global instability, crude oil prices have risen in the international market. Brent crude prices have once again reached around $85 per barrel. In such a situation, if the supply from Russia stops, the pressure on prices may increase further.
However, the Indian government has not yet issued any official statement on how it views the US warning. But the minister's statement makes it clear that India has already prepared to deal with any crisis.
Preparations to reduce imports are also underway
While the government has increased imports from Russia, it has also accelerated steps to increase oil exploration and production domestically. According to the Ministry of Petroleum, India imports more than 85 percent of its crude oil needs. To reduce this dependence, the central government has launched several new auction and exploration schemes.
Many companies have shown interest in the bidding process for onshore and offshore blocks, and domestic production is expected to increase in the coming times.
US Strategy and India's Position
The United States has taken a tough stance against Russia regarding the Ukraine war. Now, it wants to put pressure on countries that trade with Russia so that Moscow can be forced to negotiate. In this sequence, it has given clear indications that if Russia does not take any concrete steps within 50 days, its trading partners related to oil supply may also come under the scanner.
India's position is currently considered balanced. On one hand, it is keeping global pressure in mind, while on the other hand, it is taking a practical approach in terms of its energy needs.
