'No sanctions on buying oil from Russia,' says Petroleum Minister Hardeep Puri

Hardeep Singh Puri

Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on Friday said that there are no sanctions on the purchase of Russian crude oil, and the world will face serious consequences if the supplies are disrupted.

Citing the case of Iran and Venezuela, he said India has always complied with sanctions as a responsible member of the international community.

The comments have come against the backdrop of the US imposing punitive duties of 25 per cent on India, in addition to 25 per cent tariffs, for purchasing crude oil and arms from Russia.

Speaking with reporters as critical negotiations on trade policies continue between the US and India, Puri said that Russia is the second-largest supplier of crude globally at nearly 10 million barrels a day, and warned that the world will face serious consequences if supplies are disrupted.

"Energy is something you cannot do without ... If you remove the second-largest producer, you will have to cut consumption. The consequences are pretty serious," Puri told reporters in Mumbai.

This is the reason why the world is not imposing sanctions on Russian oil, the career diplomat-turned-politician said.

Puri said there are price caps imposed on buying from Russia and whenever there is any such talk, he asks Indian companies to buy at lower prices.

He also stated that many countries, including Turkey, Japan, and the European Union, purchase oil from Russia.

Puri was quick to add that the discounts offered by Russia at this point in time are not that steep.

The minister said a "broad equilibrium" is essential between the supply and demand for oil, and added that he expects crude to continue to trade between USD 65-68 a barrel going ahead.

Puri hinted that it is in the interest of the US -- a major oil producer with a thrust on shale gas-- to ensure that the prices of fossil fuels do not fall a lot.

He explained that a volatile domestic political environment sensitive to stoking inflation and the reliance on shale gas make it pertinent for the US to ensure that the prices do not fall.

State-run oil marketers autonomously decide the source of the crude oil they buy for refining, Puri said, stressing that these companies have professional management and boards as well.