Modi govt feels no pressure, says Puri as price cap on Russian oil looms

NEW DELHI: India feels no pressure from the impending price cap on Russian crude proposed by the G-7 from December 5 and is confident the market will deal with any possible impact on shipping and insurance, oil minister Hardeep Singh Puri said on Wednesday.
“The Narendra Modi government feels no pressure. I have no anxiety. We will see (how things pan out) and deal with it accordingly. The market will deal with logistics issue if they arise,” Puri told reporters on the sidelines of an industry function.
Last month Russia became India’s top oil supplier as refiners went bargain-hunting ahead of the price cap and EU embargo, which will bind insurance and maritime services. This could spoil the party for Indian refiners, even though they buy Russian barrels on delivered basis — where the seller takes care of shipping and insurance — to avoid sanctions.
Industry watchers feel the fear of sanctions will prompt Europe-registered shippers to pull out, leading to shortage of vessels and resultant spike in freight rates. This will hit the flow of Russian oil as more than half of seaborne consignments is transported in European vessels.
But executives working with state-run oil companies hold the view that the price cap plan is too fuzzy and difficult to implement. “Let’s also not forget the shipping industry’s ability to find workarounds. But yes, some buyers may be a little caution initially,” one executive with a refiner said.
Others said the world is well aware that choking supplies to India, a growth market with current consumption of 5 million barrels per day, will have devastating consequence for global oil prices.
An indication of this awareness came during US treasury secretary Janet Yellen’s visit last week when she said, “The United States is happy for India to continue buying as much Russian oil as it wants, including at prices above a G7-imposed price cap mechanism, if it steers clear of Western insurance, finance and maritime services bound by the cap.”
On his part, Puri on Wednesday said India has navigated the multiple crises gripping the world so far and will do so in future.

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