India’s Oil Minister on Securing Oil Amid Possible Sanctions

India’s oil minister, Hardeep Singh Puri, expressed confidence on Thursday regarding the country’s ability to secure oil supplies even if President Donald Trump imposes unexpected secondary tariffs on nations engaged in trade with Russia. “I’m not worried at all. If something happens, we’ll deal with it,” Puri remarked during an oil industry event in New Delhi.

He noted that India is actively diversifying its oil sources, claiming to have expanded from roughly 27 countries to about 40. This effort comes as India sees issues arising from its dependence on certain nations. In fact, a significant portion of oil sourced from these 40 countries comes from Russia, particularly after the invasion of Ukraine.

After sanctions were placed on Russia by Western nations, Indian imports from there have noticeably increased. Russia has been able to offer attractive energy deals to both India and China at reduced prices.

In June, India’s oil imports from Russia reached over 2.2 million barrels per day, reflecting the country’s status as the top global oil importer. While the Middle Eastern OPEC nations supplied 48% of Indian oil, the increasing reliance on Russian oil has raised concerns.

Should Trump impose secondary tariffs exceeding 100% on Russian oil, India may be able to adjust by sourcing oil from alternative providers. There’s speculation that the U.S. would welcome such a shift.

Initially, Russian oil cost significantly less than American oil, but that gap has narrowed to about $3 per barrel recently. Notably, India’s imports from the U.S. rose from 280,000 to 439,000 barrels per day, yet this remains a small fraction compared to the amounts sourced from Russia.

At the same event, the chairman of the Indian Petroleum Corporation mentioned that if secondary tariffs push Russian oil prices up significantly, his company might revert to pre-crisis purchasing habits if Russian supplies dwindle below 2% of their total needs. This is likely a scenario the Trump administration would consider favorable, hoping it might influence Russian policies.

As India’s oil consumption continues to rise, transitioning back to a pre-war purchasing strategy may not be as challenging as it could have been. Analysts also suggest that if China’s economy rebounds, it will soon reclaim the title of the world’s top fossil fuel consumer.

Interestingly, the Foreign Ministry in India holds a more optimistic view regarding potential Russian oil shortages compared to the Oil Ministry. Spokesman Randil Jaywal recently dismissed NATO Secretary General Mark Latte’s suggestion that nations like India and China should pressure Russia into peace talks to avoid a burden of fresh sanctions.

“Our immediate priority is meeting the energy needs of our population. We’re guided by market availability and the overall global situation,” Jaywal stated. He also implied that it’s unfair for Europe, which still imports substantial amounts of Russian oil and gas, to put pressure on countries like India to cut off ties.

A report indicated that Indian refineries might increase their Russian oil purchases before any new tariffs go into effect, stockpiling oil at discounted rates. Additionally, India appears poised to continue diversifying its oil procurement, looking to sources from Africa, Latin America, and the U.S. to improve its energy security and reduce geopolitical risks.