NEW DELHI, India’s approach to buying crude oil is to maintain multiple sources of supply and diversify them to ensure stability in energy flows, Foreign Secretary Vikram Misri said on Monday amid a swirling debate over Washington’s demand that New Delhi agree to stop importing Russian oil.
India prioritizes energy security through supply diversification: Foreign Secretary Egypt amid US demandsMisri said national interests will be the “guiding factor” for India’s choices in crude oil procurement and the key drivers of energy policy are adequate availability, fair pricing and reliability of supply.
The foreign secretary said India’s “top priority” is to protect the interests of Indian consumers and truly ensure that they get adequate energy at the right price and through reliable and secure supply.
“Our import policy in terms of energy is therefore entirely driven by these objectives,” he told a press conference when asked whether India would stop buying Russian crude oil.
“We are not dependent on any single source for this, nor do we want to be. And it is normal for the mix of sources to change from time to time depending on objective market conditions,” he said.
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“Our approach is to maintain multiple sources of supply and diversify them as appropriate to ensure stability. So, I would say the more diversified we are in this area, the safer we are,” he said.
US President Donald Trump, while announcing a trade deal with New Delhi last week, claimed that India had agreed not to buy crude oil from Russia. In an executive order, Trump revoked an additional 25 percent tariff on India that he imposed last August on India’s crude oil purchases from Russia.
In the order, the US said it will monitor whether India resumes direct or indirect purchases of Russian oil and will determine whether the 25 percent tariff will be reimposed.
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“The global economy is facing significant uncertainty which has a major impact on the stability of global energy markets. India and I would imagine many countries in the world, if not every country has a shared and common interest to ensure stable energy prices and secure supply,” Misri said.
“In fact I would underline that India is not only one of the largest consumers of energy, but also plays an important role as a stabilizing factor in the global energy market.
“And this is one reason why we import energy from multiple sources. The key drivers of our energy policy are adequate availability, fair pricing and reliability of supply,” he said.
This is why India imports crude oil from dozens of countries, Misri said.
“As far as actual energy sources are concerned again, you all follow it closely, so you know the actual sources are done by the oil companies. And they make decisions based on market conditions,” he said.
Oil companies assess the availability of crude oil at any given time, assess risks and costs in the process, and make their decisions, Misri said.
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“And obviously, all of these companies have their own internal liability-related processes and some fiduciary duty in the marketplace,” he said.
“So, at any given time, there is a complex matrix that these companies have to take into account, which should not be overlooked, including very important financial and logistical aspects,” he said.
“I hope that what you’ll continue to see in this sector, in this region, is that business choices are being made based on the considerations that I’ve outlined.
“So, what I can say strongly and confidently is that whether it is the government or indeed our business, at the end of the day, the national interest will be the guiding factor for us in our choices,” Misri said.
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