Hardeep Puri defends Russian oil purchase, says it prevented $200 per barrel prices

India's decision to continue purchasing oil from Russia amid global geopolitical and economic uncertainties has been pivotal in preventing a major spike in global oil prices, according to Union Petroleum and Natural Gas Minister Hardeep Singh Puri. Speaking in an interview with CNN on the sidelines of the ADIPEC energy conference in Abu Dhabi, Puri outlined that without India's consistent oil purchases from Russia, oil prices could have surged to as high as $200 per barrel, impacting global markets. “India did the entire world a favour,” Puri remarked, emphasizing India's role in stabilizing the energy market during a period of crisis.

India’s oil imports from Russia began to rise significantly after the outbreak of the Russia-Ukraine conflict in 2022, which caused a disruption in global energy supplies. The Western sanctions imposed on Russia significantly reduced the availability of Russian oil in international markets, creating price volatility. Puri explained that had India decided to stop purchasing Russian oil and instead sourced it from other suppliers, the removal of 13 million barrels of Russian oil from the market could have driven prices higher. He noted that had this scenario unfolded, oil prices could have potentially reached $200 per barrel, creating further economic hardship for consumers around the globe.

In terms of India’s energy strategy, Puri stated that the country remains confident about the outlook for oil prices, predicting stability and potential price decreases in the coming years. He forecasted that by 2026, global oil prices would likely stabilize as alternative energy sources and technologies become more widely available. He specifically pointed to developments in green hydrogen and the transition to cleaner energy solutions, which are expected to alter the global oil demand landscape. Despite these shifts, he asserted that oil will remain a crucial component of the global energy mix for the foreseeable future.

Puri also addressed the issue of India’s oil import strategy in recent months, noting a 10% reduction in oil imports from Russia in October 2024. He clarified that this reduction was purely due to market dynamics and competitive pricing. With several oil suppliers offering similar rates, and OPEC's stance of not setting oil prices, there has been increased competition among energy providers. This allowed India to secure competitive prices for its oil, while still maintaining its energy security and meeting the needs of its growing population. Puri emphasized that these decisions were driven by the goal of obtaining the best possible deal in the marketplace rather than any strategic shift.

The Union Minister further addressed the criticism India has faced over its continued Russian oil purchases. He pointed out that while some commentators have called for India to face sanctions or restrictions, several European and Asian nations had made even larger energy purchases from Russia, including crude oil, liquefied natural gas (LNG), and rare earth minerals. He underlined that India’s approach is guided by its need for affordable and reliable energy to support its economy and citizens, particularly as the country is the third-largest oil consumer globally.

Puri also emphasized that India's energy policies focus on ensuring energy security and affordability for its 1.4 billion citizens. Despite unprecedented global price hikes, India has managed to reduce fuel prices over the past three years, setting it apart from other major oil-consuming nations that have experienced significant fuel price increases. India’s ability to keep fuel prices lower is seen as a major achievement, given the global volatility in energy prices. The government’s top priority remains ensuring the continuous, affordable, and sustainable availability of energy, which is critical as the country’s economy and energy demands continue to grow.

India’s significant role in global energy markets and its approach to energy procurement were also highlighted by its oil consumption patterns. According to the International Energy Agency, India is the third-largest oil consumer globally, with its energy needs growing rapidly in line with its expanding population and economy. As such, Puri stressed the importance of maintaining steady oil imports while continuing efforts to diversify energy sources, including a greater focus on renewable energy and energy efficiency technologies.