‘We will buy oil from wherever we have to': India minister Puri on Trump’s secondary sanctions threat

While commenting on US President Donald Trump’s secondary sanctions threat against India, Union Minister Hardeep Singh Puri said that India diversified its sources of buying oil and is not facing pressure over Trump’s new threat. The remarks from Puri came when Firstpost’s Managing Editor, Palki Sharma, asked him about Trump’s secondary sanctions threat and the kind of impact it can have on the Indian oil industry.

On Tuesday, Trump announced a whopping 100 per cent tariffs on Russian exports, including oil, expressing his displeasure with Russian President Vladimir Putin’s reluctance to negotiate a peace deal. Apart from this, Trump also introduced equivalent secondary tariffs on countries importing Russian shipments, with India being one of them.

Trump warned that the tariffs would be imposed after a 50-day deadline for Moscow to end the war against Ukraine. When asked about the secondary tariff warning, Puri said at the Thursday event that right now he does not have “any pressure” in his mind. He acknowledged that India’s import of Russian oil has increased significantly following the war in Ukraine.

However, he maintained that during this period, India has diversified its sources of supply. “Over the last 11 years, we diversified our options, built resiliency and navigated challenges. Each challenge posed by turbulence provided us with opportunities,” Puri told Firstpost. “We have gone from 27 countries that we used to buy from to about 4 countries.”

‘We’ll buy oil from wherever we have to’: Puri

While talking about buying oil from “source 1 or 2,” the Minister of Petroleum and Natural Gas made it clear that India “will buy from wherever” it has to. “The Prime Minister’s commitment is his final analysis to the Indian consumer,” he said. Puri emphasised that in the last 10-11 years, 16 per cent of the growth in the International energy market has come from India.

“The International Energy Agency has said that in the next two decades, 25 per cent of the global [energy] growth is going to come from India,” he said. Emphasising how Russia supplies 10 per cent of global oil consumption per day, Puri pointed out the impact of sidelining Russia in this regard might have on the world.

“Some people won’t get heating in winter, some people won’t get air conditioning in summer. So 10 per cent consumption deduction is not an easy thing, or something else will happen. When you decide 10 per cent is going off the table and you don’t want to reduce consumption, then you start buying more from the remaining 90 per cent,” Puri explained.

The union minister pointed out that the repercussions of taking Russia off the market would be drastic. “The price would skyrocket. We analysed that if more and more people are to buy from other OPEC sources, prices would have gone up to a minimum $130 to $140 a barrel. So if we are buying from any source we could, I think we should be applauded,” he said.

‘They buy more in one afternoon than I buy in one quarter’: Puri

While speaking to Firstpost, Puri called out the European Union’s purchase of Russian natural gas. He noted that the EU continues to remain Russia’s largest buyer of LNG and pipeline gases. He recalled one instance when he told External Affairs Minister Dr S Jaihankar that “they [EU] buy more in one afternoon than I buy in one quarter”.

“Today, two major suppliers of crude are sanctioned, Iran and Venezuela. Will those sanctions remain forever? There is more oil coming to the market from the Western hemisphere from countries like Brazil, Canada and Guyana. I am not worried at all. If something happens, we’ll deal with it,” he said.

“Let’s not draw any inferences. We’ll cross the bridge when we come to it, but I am not unduly worried because we have enough oil even when there was discussion of turbulence. It’s all about do we have the navigational resilience to steer the ship through. I think we are more confident that we have it,” he added.

India is one of the biggest consumers of Russian oil

Since February 2022, Indian refiners have been lapping up Russian oil at discounted rates while the West has shunned Russia by imposing sanctions. Russia currently accounts for a third of India’s oil imports, compared to less than 1 per cent before the war.

Hence, if Trump carries through with his threats, India might take a significant hit. According to reports floated by Western media, a secondary tariff will apply to the country and affect all merchandise exports, unlike in the case where only the entities doing business with sanctioned Russian entities are penalised.

If something like this happens, Indian refiners will have no other option but to pivot towards West Asian suppliers and new suppliers such as Brazil to make up for the lost supply. However, these barrels will come at a higher cost. In light of this, the government had already approached two major West Asian oil producers to examine additional supplies.