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‘India has enough time to find alternatives for crude supply’

ByRajeev Jayaswal
Jan 14, 2025 03:00 PM IST

The US sanctions imposed on Friday target Russian oil producers Gazprom Neft and Surgutneftegaz, along with 183 vessels involved in shipping Russian crude

NEW DELHI: India will not face immediate energy supply disruptions following fresh US sanctions on Russian oil producers, as crude already in transit will continue arriving for six to eight weeks, giving New Delhi time to secure alternate supplies and work out solutions with the incoming Trump administration, senior government officials said.

A general view shows a refinery complex in Nizhnekamsk in the Republic of Tatarstan, Russia. (REUTERS FILE PHOTO)
A general view shows a refinery complex in Nizhnekamsk in the Republic of Tatarstan, Russia. (REUTERS FILE PHOTO)

“We have enough time to find commercially viable alternatives,” said a senior petroleum ministry official who requested anonymity. “India is not worried about crude supplies given the spare capacity with both traditional suppliers and new producers like the US, Guyana, Canada, Brazil and Surinam.”

However, price volatility remains a concern for India, which imports over 87% of its crude oil requirements. “Any spike in global crude oil prices and market volatility impacts major economies, including the US. India is engaged with the US government and there is hope President Trump’s administration will cooperate when it takes over next week,” another official said, also speaking on condition of anonymity.

The US sanctions imposed on Friday target Russian oil producers Gazprom Neft and Surgutneftegaz, along with 183 vessels involved in shipping Russian crude. The move sent benchmark Brent crude surging past $81 per barrel on Monday, its highest since August.

Goldman Sachs warned that sanctions could push oil above $85 per barrel in the short term and potentially to $90 if reduced Russian output coincides with lower Iranian production, according to Reuters.

“The market impact will unfold gradually depending on geopolitical changes after the Trump administration takes over on January 20,” the first official said, hinting at other Russian suppliers may continue providing crude oil below the cap. Industry estimates suggest Indian refiners were importing 1-1.5 million barrels per day of Russian crude at company-specific discounts.

“In the worst case, we may lose Russian discounts. But there are other producers, including some outside OPEC, who could become long-term suppliers,” the official added.

India is actively pursuing alternative supply arrangements. During PM Narendra Modi’s recent state visit to Guyana (November 19-21, 2024), both countries agreed to cooperate in the hydrocarbon sector, including crude sourcing.

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Stay updated with the latest Business News on Petrol Price, Gold Rate, Income Tax Calculator along with Silver Rates, Diesel Prices on Hindustan Times.
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