India will secure oil from anywhere as long as the terms are beneficial, India’s energy minister told CNBC.
India is the third largest oil consumer in the world, and according to Hardeep Singh Puri, accounts for 30% of global consumption.
“Today we feel confident that we’ll be able to use our market to source from wherever we have to, from wherever we get beneficial terms,” the minister told CNBC’s Tanvir Gill on “Squawk Box Europe,” as part of India’s energy week.
“By beneficial terms in this situation is: you have to be sure of your supplies,” he explained.
India has been buying Russian oil at a steep discount since global powers imposed sanctions on the Kremlin in a bid to cut down its ability to raise funds for its war against Ukraine.
India’s oil imports jumped to a five-month record in December as the country actively ramped up its purchases of Russian crude, according to Reuters.
The report also said that some 70% of January cargoes of Russian oil are going to India, and that the South Asian country is the top buyer of Moscow’s Ural grade oil for several months now.
“We didn’t allow the geopolitical turbulence or the pandemic or anything else to come in the way of our ability to supply to our consumer,” Puri added.
In his inaugural address at India’s Energy Week, Prime Minister Narendra Modi called upon foreign investors to take advantage of opportunities in India’s energy sector.
“Our expanding energy sector is creating new opportunities for investment and collaborations in India,” Modi said Monday in Bengaluru, Karnataka. “We are also working on mission mode to increase natural gas consumption in our energy mix by 2030. A target has been set to increase it from 6%to 15%.”
Puri further noted India’s oil consumption has been 5 million barrels a day for a long time. But there is room for local consumption to increase in line with the country’s economic growth, he added.
“If the economy grows at 6.5%, 7% and our consumption grows at three times the global average, then you’ll be looking at not 5 million barrels. But 6 or 6-and-a-half million barrels,” he said, acknowledging it’s still uncertain when that will happen.
Both China and India have increased their purchases of Russian oil in the wake of Moscow’sinvasion of Ukraine, benefiting from discounted rates.
India sees its oil purchase from Russia in a different light, said the oil minister. He painted a hypothetical scenario that if global oil supply were to be disrupted, it could lead to a massive jump in oil prices.
“Can you imagine a situation, [where] Iran oil is sanctioned, Russia has problems, Venezuela cannot supply its oil. Then oil price will not be $200 — it will be $480,” Puri said, underlining the Indian government isn’t concerned about where supply comes from, including Russia.