Indian Oil Refiners Continue To Source Oil From Russia, Says Report: 'Global Oil Prices Could Have Surged If...'

(MENAFN- Live Mint) Indian oil refiners continue to source oil from Russian suppliers, sources told news agency ANI on Saturday. The statement came hours after US President Donald Trump said, "I understand that India is no longer going to be buying oil from Russia. That's what I heard, I don't know if that's right or not."

Clarifying on Trump's remarks, sources revealed that Indian oil refiners ' supply decisions are“guided by price, grade of crude, inventories, logistics and other economic factors.”

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Providing context for India's decision to continue sourcing oil from Russian suppliers, sources said that Russia , the world's second-largest crude oil producer with an output of around 9.5 mb/d (nearly 10% of global demand), is also the second-largest exporter, shipping about 4.5 mb/d of crude and 2.3 mb/d of refined products.

“Fears of Russian oil being pushed out of the market and the consequent dislocation of traditional trade flows drove dated Brent crude prices to soar to US $137 per barrel in March 2022,” they said.

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"In this challenging environment, India, as the world's third-largest energy consumer with 85% crude oil import dependence, strategically adapted its sourcing to secure affordable energy while fully adhering to international norms," added sources.

They contended:“Had India not absorbed discounted Russian crude combined with OPEC production cuts of 5.86 mb/d, global oil prices could have surged well beyond the March 2022 peak of US$137/bbl, intensifying inflationary pressures worldwide.”

Backing their decision to continue sourcing Russian Oil , sources said that India's energy decisions have been guided by national interest but have also contributed positively to global energy stability.

“India's pragmatic approach kept oil flowing, prices stable, and markets balanced, while fully respecting international frameworks,” they said.

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Providing further historical context to its decision of sourcing Russian Oil, sources told ANI that Russian oil has never been sanctioned. It is still not sanctioned by either US or EU, they said.

Instead, it was subjected to a G7/EU price-cap mechanism designed to limit revenue while ensuring global supplies continued to flow, sources said.

“India acted as a responsible global energy actor, ensuring markets remain liquid and prices stable. India's purchases have remained fully legitimate and within the framework of international norms,” they added.

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Indian OMCs have not been buying Iranian or Venezuelan crude which is actually sanctioned by US. OMCs have always complied with the price cap of $60 for Russian oil recommended by the US. Recently EU has recommended a price cap of $47.6 dollars for Russian crude which will be enforced from September.

Trump announced this week that the US would levy 25 percent tariff, "plus penalty", on good imported from India. He imposed the penalty on India for buying“vast majority" of its military equipment and energy from Russia“at a time when everyone wants Russia to stop the killing in Ukraine.”

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Earlier on July 3, Reuters reported, citing its sources, that Indian state-owned refineries suspended Russian oil purchases last week amid threats of tariffs from US President Donald Trump and narrowing price discounts.

Sources further rebutted media reports of India halting purchase of Russian Oil and after US President's latest comment echoing the claim in the media report.

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