India will not change its energy policy to buy oil and gas at the lowest possible price and will continue to purchase cheaper Russian crude supply, Indian Oil Minister Hardeep Singh Puri told Reuters at the Gastech conference in Houston.
“If an entity is not under sanctions, there is no question I will buy from the cheapest supplier,” the minister said.
The world’s third-largest crude oil importer, India, relies on imports to cover more than 85% of its petroleum consumption, which is growing in lockstep with economy and refinery expansion plans.
Over the past two years, India has become a key buyer of Russia’s oil, which is selling at a discount because of the sanctions and embargoes on Russian crude exports to Western countries.
The attractiveness of cheaper crude supply has made Russia the single biggest supplier of oil to India.
In July, India even topped China to become the biggest buyer of Russian crude oil, as Chinese refiners lowered purchases amid falling refining margins and tepid fuel demand.
A record 44% of India’s total imports in July came from Russia, according to data from industry and trade sources compiled by Reuters.
India’s imports from Russia hit a record 2.07 million barrels per day (bpd) in July, up by 4.2% from June and up 12% from the same month a year earlier.
India has snapped up a large part of Russian spot supply over the past two years, but it is now looking to sign long-term supply deals.
Indian state-held refiners have started jointly to discuss terms of a potential deal with Russia for long-term supply of Russian oil, a government source with knowledge of the matter told Reuters in July.
India needs “predictable and stable” oil supplies amid expanding refining capacity, the source added.
India expects to boost its refining capacity by around one-fifth to have 6.19 million bpd of crude processing capacity by 2028, according to its junior petroleum minister.
By Tsvetana Paraskova for Oilprice.com
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