NEW DELHI: India is not facing immediate energy shortages after new US sanctions were placed on Russian oil producers. Crude oil already on its way will arrive in India over the next six to eight weeks. This gives the country enough time to find new suppliers and make plans with the upcoming US administration.
“We have sufficient time to explore viable alternatives,” said a senior official from the petroleum ministry. “India is not worried about crude supplies because we have both traditional sources and new ones, such as the US, Guyana, Canada, Brazil, and Suriname, for our needs.”
However, India is still cautious about price changes. The country relies on imports for over 87% of its crude oil. “If global crude prices spike, it can affect major economies, including the US. We are in talks with the US government, and we hope the new administration will work with us,” said another official.
The recent sanctions target Russian producers like Gazprom Neft and Surgutneftegaz, along with 183 ships involved in transporting Russian oil. This prompted a rise in Brent crude prices, which climbed over $81 per barrel, the highest since August.
According to Goldman Sachs, these sanctions might push oil prices beyond $85 per barrel soon, and if there is reduced production from Russia and Iran, prices could reach $90.
“The market’s response will depend on geopolitical shifts after the new US administration takes office on January 20,” the first official noted. They suggested that some Russian suppliers may still send crude oil while staying under the price cap. It is estimated that Indian refiners were importing around 1-1.5 million barrels of Russian crude daily at discounted prices.
“In the worst-case scenario, we might miss out on these discounts. However, we have other suppliers, including those outside OPEC, who can step in as long-term providers,” the official added.
India is actively seeking new supply options. During Prime Minister Narendra Modi’s recent visit to Guyana, the two countries agreed to collaborate in the hydrocarbon sector, which includes sourcing crude oil.
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