India will carefully consider whether to endorse a G-7 plan to set a restriction on the price of Russian oil, according to Indian Petroleum Minister Shri Hardeep Singh Puri, who made the announcement on Monday.
At the Gastech 2022 conference in Milan, Italy, Puri told CNBC’s Hadley Gamble, “There are various dialogues taking place owing to a vast variety of things.”
Puri responded that the world economy was still adjusting to the effects of the coronavirus outbreak and Russia’s invasion of Ukraine when asked if India would support the G-7 plan to place a price restriction on Russian oil.
What does the proposition mean now? We’ll take a close look at it, he said.
Puri further stated that it was yet unknown which nations will participate in the proposed price cap on Russian oil and what effects it may have on the energy markets.
G-7 finance ministers came to an agreement on a strategy to put in place a mechanism to control the price of Russian oil exports on Friday.
The proposal aims to better safeguard customers in the face of rising energy prices by limiting the Kremlin’s ability to bankroll its assault on Ukraine.
However, energy specialists have expressed great scepticism about the validity of the concept, cautioning that the strategy could backfire if important users like China and India are not included.
“I have a moral obligation to my customer.”
Following the Russian invasion of Ukraine, China and India have expanded their purchases of Russian oil, taking advantage of lower prices.
Puri stated that over 5 million barrels of oil are consumed by India every day, with the majority of this oil coming from Iraq, Saudi Arabia, Kuwait, and the United Arab Emirates.
At the end of March, only 0.2% of India’s oil imports came from Russia, according to Puri, who noted that some people had criticised India for expanding its supply of Russian oil in response to the Kremlin’s invasion.
“I stated that compared to what I buy in a quarter, Europeans buy more in a single hour. If that is not the situation, I would be astonished. But absolutely, Puri answered, “We would buy from Russia and from everywhere else.
When asked if, in light of the Kremlin’s assault on Ukraine, he had a moral difficulty with purchasing Russian oil, Puri responded, “No, there’s no conflict. I have a moral obligation to my client. Do I want a situation where the gas station runs out of fuel as the democratically elected government? Look at the developments in many nations. around India.”
China and India have been urged by the EU to join the G-7 plan to cut down on Russia’s oil sales earnings.
China and India “are willing to acquire Russian oil goods while excusing themselves that this is vital for their security of supply,” Europe’s Energy Commissioner Kadri Simson told CNBC’s Silvia Amaro on Saturday. However, it is unfair to give Russia the extra money.
How the G-7 will carry out its price-capping strategy is still unclear. Before early December, when EU bans on seaborne imports of Russian petroleum go into effect, the specifics are anticipated to be worked out.
The United States, Canada, France, Germany, Italy, the United Kingdom, and Japan make up the G-7.
On Monday, Russia threatened to retaliate against the proposal and announced that it will stop exporting oil to nations that place price limitations on Russian energy exports.
The introduction of a price ceiling on Russian oil, according to French Finance Minister Bruno Le Maire, needs widespread support from the international community to be successful.
Le Maire said that the idea should be undertaken as a “global measure against war” rather than a Western-only measure.