Oil storage tanks in Tuapse, Russia, March 22, 2020.
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SINGAPORE — India’s imports of Russian crude is a win-win situation for the world economy, according to India’s No. 1 oil company, Oil and Natural Gas Corporation.
“By importing from Russia, India also has helped the global economy in the sense that [we] freed up some oil on the Gulf for other countries to source, particularly Europe. So it was kind of a win-win situation,” K.C. Ramesh, executive director of ONGC said at the annual APPEC energy conference held by S&P Global Insights in Singapore.
Since Russia’s invasion of Ukraine in February last year, India’s refiners have been snapping up discounted Russian oil. Moscow has since leapfrogged to become India’s leading source of crude oil, accounting for about 40% of India’s crude imports.
World powers, including the European Union and the Group of 7, have placed sanctions and restrictions on Russia’s oil exports since its unprovoked war on Ukraine.
India’s economy has benefited from the discounted prices, Ramesh said.
“[It has] a very huge impact on our economy, in terms of helping the [Indian] economy grow … the price being very reasonable that we get from Russia,” said Ramesh.
India’s purchase of cheap Russian crude has been widely criticized by the West. In May, the EU’s chief diplomat Josep Borrell urged the bloc to crack down on India reselling refined Russian oil into Europe.
India is the world’s third largest energy importer, and buys more than 80% of its crude oil from international markets. According to July data from S&P Global, India’s crude oil sources come largely from the Middle East and Russia.
“God has given India a lot of things … but no resources,” said Fereidun Fesharaki, chairman of energy consultancy Facts Global Energy said at a separate panel discussion.
“Limited amount of oil, and limited amounts of gas,” he said.
That said, India is also investing in upstream opportunities in the oil industry.
“We are planning to have few investments in survey and exploration,” Ramesh said, citing an investment of about $44 billion for the next three years.
The upstream segment of the oil and gas industry refers to the exploration for oil or gas deposits, and then extracting them.
“We need fuel. And that’s what we’re planning to go for. So the investments are going to be there, for sure.”