New Delhi: Union petroleum and natural gas minister Hardeep Singh Puri said on Wednesday that Indian refineries are equipped to process Venezuela’s additional crude oil and that India would continue to look at sourcing oil from the most affordable sources. The comment follows the easing of sanctions on Venezuela by the US.
Earlier this month, America eased measures against Venezuela after both sides of its political divide agreed on international election supervision next year.
Emphasizing energy security and affordability, Puri said, “We will buy from where we can find the cheapest, and Venezuelan oil can now be used in our refineries…If Venezuela (Venezuelan oil) comes on the market there should be sobering. effect on all other countries (oil producing countries).”
S&P Global Commodity Insights said in a report on October 30 that Indian refiners are likely to import crude oil from Venezuela at a discounted rate after the US eased sanctions on oil from the Latin American country.
Between 2017 and 2019, India steadily bought Venezuelan crude oil, which constituted 5-7% of its total oil imports.
India has diversified its sourcing in recent years to achieve energy security. After February 2022, amid Western sanctions, Russia became India’s top oil supplier, offering attractive pricing. While Russian oil accounted for only 2% of India’s imports in FY22, it rose to about a quarter of India’s total FY23 imports of 235.52 million tonnes.
Puri said India’s oil import sources have increased, with imports now received from 39 countries.
Highlighting the volatility of global oil prices, especially after Russia’s invasion of Ukraine and conflict in the Middle East, Puri warned oil producers against deep cuts amid ongoing geopolitical tensions.
“You don’t want to build it so high that demand falls off because it goes into recession. And also you do not want to keep the prices so low that you do not get back … There are other problems in the global economy. There are conflicts in some parts of the world that are directly and closely related to the energy supply channels, you must be very careful. It is in everyone’s interest that you allow a healthy recovery for the global economy,” he said.
Saudi Arabia and Russia maintained production cuts to bolster oil prices. Both nations extended voluntary cuts to 2023, beyond a 1.66 million bpd reduction already announced in April.
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Updated: 01 November 2023, 08:56 PM IST
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