Oil pumping jacks operate in an oilfield near Almetyevsk, Tatarstan, Russia, Wednesday, March 11, 2020.
Andrei Rudakov | Bloomberg | Getty Images
Indian Oil Minister Shri Hardeep Singh Puri said on Monday the country would carefully assess whether to support a G-7 proposal to impose a cap on the price of Russian oil.
“There are a lot of conversations going on due to a lot of factors,” Puri told CNBC’s Hadley Gamble at Gastech 2022 in Milan, Italy.
Asked if India would sign up to the G-7 proposal to cap Russian oil prices, Puri said the global economy was still adjusting to the impact of the coronavirus pandemic. coronavirus and Russia’s invasion of Ukraine.
“Now what will the proposal mean? We will consider it very carefully,” he said.
Puri added that it was still unclear which countries would participate in the proposed Russian oil price cap and what the possible implications for energy markets might be.
Finance ministers representing G-7 countries agreed Friday on a plan to implement a price cap mechanism for Russian oil exports.
The initiative is designed to limit the Kremlin’s ability to fund its attack on Ukraine and better protect consumers from soaring energy prices.
Energy analysts, however, have been highly skeptical of the integrity of the proposal, warning that the policy could backfire if key consumers such as China and India are not involved.
“I have a moral duty towards my consumer”
China and India increased their purchases of Russian oil following the Kremlin’s invasion of Ukraine, benefiting from reduced rates.
Puri said India consumes around 5 million barrels of oil per day and much of it comes from Iraq, Saudi Arabia, Kuwait and the United Arab Emirates.
Russia accounted for just 0.2% of India’s oil imports at the end of March, Puri said, noting that some have criticized India for increasing its supply of Russian oil after the Kremlin invasion.
“I said that Europeans buy more in an afternoon than I do in a quarter. I would be surprised if that was not the case yet. But yes, we will buy in Russia, we will buy from anywhere” , Puri said.
When asked if he had a moral conflict with buying Russian oil amid the Kremlin assault on Ukraine, Puri replied: “No, there is no conflict. I have a moral duty to my consumer. Do I, as a democratically elected government, want a situation where the gas pump is running dry? Look at what is happening in the countries around India.”
The EU has called on China and India to participate in the G-7 initiative to cut Russia’s profits from oil sales.
EU Energy Commissioner Kadri Simson told CNBC’s Silvia Amaro on Saturday that China and India “are ready to buy Russian petroleum products while apologizing that this is important for their security of supply. But it’s unfair to pay surplus revenue to Russia.”
It is not yet clear how the G-7 will implement its price cap plan. Details are expected to be ironed out before early December, when EU sanctions on maritime imports of Russian crude come into effect.
The G-7 is made up of the United States, Canada, France, Germany, Italy, the United Kingdom and Japan.
Russia pledged on Monday to retaliate against the proposal and said it would stop selling oil to countries that impose price caps on Russian energy exports.
French Finance Minister Bruno Le Maire told CNBC on Saturday that efforts to introduce a cap on Russian oil prices require broad international commitment to succeed.
Rather than a Western-only measure, Le Maire said the initiative should be implemented as a “global measure against war”.
— CNBC’s Silvia Amaro contributed to this report.