If India were to stop buying Russian oil, global crude prices could jump to 200 dollars a barrel: Report

Mint

a day ago

Global crude prices could jump to 200 US Dollars a barrel if India were to stop buying Russian Oil thus severely harming consumers worldwide, sources told ANI.
Russian oil has never been sanctioned and is still not sanctioned by either the United States or the European Union.
Providing context for India's energy security policy, sources explained that Russia, the world's second-largest crude oil producer with about 9.5 million barrels per day output – nearly 10% of global demand – is also the second-largest exporter, shipping roughly 4.5 million barrels per day of crude and 2.3 million barrels per day of refined products.
Past fears of Russian oil being squeezed out of global markets had driven Brent crude prices to a high of $137 per barrel in March 2022.
"In this challenging environment, India, as the world's third-largest energy consumer with 85% import dependence, strategically adapted its sourcing to secure affordable energy while fully adhering to international norms," sources added.
Earlier, United States President Donald Trump on Friday ( EST) claimed that India may cease purchasing Russian oil, calling it "a good step" if confirmed, while India has defended its sovereign right to pursue an energy policy in its own national interest.
News agency Reuters reported on July 31st that Indian state-run refiners suspended purchases of Russian oil amid tariff threats from President Trump and narrowing price discounts. However, Indian sources have now rebutted these reports, clarifying that Indian refiners have continued to buy Russian crude based on commercial viability.
Sources further told ANI that Russian oil has never been sanctioned, but rather subjected to a G7/EU price-cap mechanism to limit Russian revenues while keeping global supplies flowing. India oil refiners' purchases have remained fully legitimate under international frameworks.
"Had Indian oil refiners not absorbed discounted Russian crude, combined with OPEC production cuts of 5.86 million barrels per day, global oil prices could have surged well beyond the March 2022 peak of 137 dollars per barrel, intensifying inflation globally," sources explained.
It was also highlighted that Indian oil marketing companies (OMCs) have refrained from buying Iranian or Venezuelan crude, which is actually sanctioned by the US, and have complied with the $60 per barrel price cap recommended for Russian oil by the US. The European Union has recently recommended a lower price cap of $47.6 per barrel for Russian oil, to take effect in September.
Commenting on Europe's continued Russian energy imports, sources noted the EU was the largest importer of Russian-origin liquefied natural gas (LNG), buying 51% of Russia's LNG exports, followed by China at 21% and Japan at 18%. For pipeline gas, the EU remained the top buyer with a 37% share, followed by China at 30% and Turkey at 27%.
Backing India oil refiners' decision to continue sourcing Russian oil, sources reiterated that India's energy choices are guided by its national interest, while also contributing to global energy stability. "India's pragmatic approach has kept oil flowing, prices stable, and markets balanced, while fully respecting international frameworks," they added.