India Will Buy Oil From Anyone Who Offers the ‘Lowest Possible Prices’ 2023 : Oil Minister Hardeep Singh Puri
India’s oil minister told a TV on Wednesday that his country will purchase oil from any supplier that offers it for the “lowest possible prices.” Since the west implemented import restrictions in response to its invasion of Ukraine last year, India has been purchasing crude oil at reduced costs from Russia, which is now its primary oil supplier.
Oil Minister Hardeep Singh Puri stated, “We are absolutely clear in our views that we will buy oil from anywhere we can obtain it as long as it is delivered to our point of importation at our ports at the lowest feasible price.
India, the third-largest oil importer and user in the world, imports more than 80% of its oil. When questioned about rupee trading with the United Arab Emirates (UAE), the minister stated that there were “very few” transactions in the energy industry.
In July, the two nations decided to encourage commerce in rupees rather than dollars. With the UAE, we have a rupee-dirham exchange rate, but there are relatively little transactions in the oil industry, he added.
In a candid statement that reflects the pragmatism of India’s energy policy, Oil Minister Hardeep Singh Puri announced that the country would buy oil from “anyone who offers the lowest possible prices.” This forthright approach comes amid fluctuations in global oil prices and an increasingly complex geopolitical landscape. But what does it mean for India’s oil sector, international relations, and the global energy market?
India is the third-largest consumer of oil in the world, trailing only the United States and China. With a burgeoning economy and a massive population, India’s energy demands are consistently on the rise. The country imports over 80% of its crude oil needs, making it highly susceptible to global oil price fluctuations and geopolitics. Minister Puri’s statement, therefore, is not just a comment but a policy direction that comes with its array of implications.
By opening its market to any seller willing to offer the lowest prices, India is effectively inviting competition among oil-producing nations. Countries rich in oil reserves will find it advantageous to keep prices as competitive as possible to secure a share of the Indian market.
This approach strengthens India’s bargaining position. Oil producers will need to consider offering more competitive prices to maintain or gain market share in India, a key importer. This, in turn, could have a domino effect, influencing prices in other oil-importing nations.
Puri’s statement highlights a level of diplomatic neutrality in terms of oil import partners. This allows India more flexibility in its foreign policies and relationships, ensuring that the country isn’t heavily reliant on any particular nation for its energy requirements.
However, the strategy is not without its complexities. India has to navigate a delicate balance, especially considering its relations with major oil producers like Saudi Arabia, Iran, the United States, and Russia, each of which comes with its own set of geopolitical strings.
The “lowest-price” strategy is primarily an economic approach but could potentially come into conflict with India’s energy security objectives. Relying on multiple suppliers might offer price advantages but also increases vulnerability to geopolitical shocks. In a scenario where the lowest bidder faces sanctions or internal strife, India would need a fallback option.
If successful, this approach could help mitigate inflationary pressures arising from volatile oil prices, thereby stabilizing the domestic economy to some extent.
However, the method is not without risks. Any shift in suppliers, especially away from longstanding partners, may stir domestic political debates, which could make the implementation of this policy challenging.
Oil Minister Hardeep Singh Puri’s statement about India buying oil from anyone who offers the lowest possible prices is a strategic declaration with far-reaching implications for both India and the global oil market.
While it strengthens India’s hand in terms of economic and diplomatic flexibility, it also presents challenges in the realms of energy security and geopolitics.
Ultimately, how successfully India navigates this policy will depend on its ability to balance the benefits of competitive pricing against the complexities of international relationships and domestic stability.
