India buying more volumes of crude oil from Russia is still less than 1% of the total oil imports, while the volumes from the US will rise significantly, Petroleum Minister Hardeep Singh Puri said.
Replying to supplementary during the Question Hour in the Rajya Sabha, he said India bought 4,19,000 tonnes of crude oil from Russia during the first 10 months of the current fiscal year that began in April 2020, which was 0.2% of the total import of 175.9 million tonnes.
In 2020-21, India imported 6,33,000 tonnes or 0.3%, while in 2019-20 the purchases were 2.93 million tonnes or 1.3% of total imports, he said.
The statement comes against the backdrop of Indian firms picking up distressed Russian cargoes being offered at deep discounts. While Indian Oil Corporation (IOC) has bought 3 million barrels through a trader, Hindustan Petroleum Corporation Ltd (HPCL) has picked up 2 million barrels.
“We require a total of 5 million barrels per day. That is our (crude oil) consumption. 60% of it comes from the Gulf,” he said. “Even if we were to scale these up considerably, it would still be a drop, literally a drop, in a larger bucket.”
Stating that oil imports from Russia are minuscule, he said, “even now, the total amount contracted will be less than three days’ supply from Russia to India and that also spread over the next three to four months.”
On the US, Puri said India has a robust bilateral energy relationship with Washington.
In the financial year 2020-21 (April 2020 to March 2021), India imported 14 million tonnes of crude from the United States, representing 7.3% of total imports.
“In the current year, based on our imports from the United States and if I look at the projection, these are likely to go up from 14 million tonnes to 16.8 million tonnes or a value of about $10 billion of imports of crude oil from the US,” he said.
Adding imports of LNG and coal, the trade will be close to $13.5 billion, he said. “So, it is a robust relationship on the energy front, and I see this continuing for some time.”
On the impact of western sanctions on Indian investment in Russia, the minister said Indian state oil firms have invested $16 billion in oil and gas projects in Russia.
Some multinationals including ExxonMobil and Shell have announced exit from the Russian projects after Moscow invaded Ukraine.
This, Puri said, is nuanced. “Some have indicated an intent to exit. Others have said they will not make a fresh investment. But, as I said, we are monitoring the situation.”
Discussions are happening at the highest levels of those companies. “I have no doubt that if those companies were to exit finally and if there are economic opportunities, that become available, we will, certainly, look at all those possibilities.”
ONGC Videsh Ltd has a 20% stake in the Sakhalin-I project in Far East Russia, from where the operator ExxonMobil has announced exit.
“We got worried when we read those reports because if the operator is exiting, then the facilities’ production will be undermined. But we were told that no. Production facilities will continue,” he said.
On the four-month freeze on petrol and diesel prices despite the cost of raw material (crude oil) climbing from $81-82 per barrel to $111 on Monday, he said the concerned oil firms will take a decision.
“The concerned oil companies have not passed this (increase in crude oil price) on to the consumer. When they will, etc., these are decisions which they will have to take,” he said.
Puri said India had in November last year joined other consuming nations such as the US, Japan and Korea to release stocks from strategic oil reserves. That “release had some sobering impact (on international oil prices).”
But India did not join the recent stock release at the behest of the IEA.
“India had signalled an intent, a support, but we have not done the release,” he said. “Releases from strategic reserves can have a limited impact in a given situation, but when the international market is so roiled as it is today, high prices, I think, are of limited concern.”
