Indian refiners equipped to process Venezuelan crude: Minister Puri

New Delhi: Union minister for petroleum and natural gas, Hardeep Singh Puri, on Wednesday said that Indian refineries are equipped to process Venezuela’s extra heavy crude and that India would continue look at sourcing oil from the most affordable sources. The comment follows the easing sanctions on Venezuela by the US.

Earlier this month, America relaxed measures against Venezuela after both sides of its political divide agreed to international election oversight next year.

Emphasizing on energy security and affordability, Puri said, “We will buy from wherever we can get cheapest, and Venezuelan oil by the way can be used in our refineries now…If Venezuela (Venezuelan oil) comes on the market it should have a sobering effect on all the other (oil producing countries).”

S&P Global Commodity Insights in a report on 30 October said that Indian refiners are likely to import crude oil from Venezuela at a discounted rate after the US eased sanctions on oil from the Latin American country.

Between 2017 and 2019, India consistently bought Venezuelan crude, which comprised 5-7% of its total oil imports.

India has diversified its crude sourcing over the past few years to achieve energy security. Post-February 2022, amid Western sanctions, Russia became the top oil supplier to India, offering attractive pricing. While Russian oil comprised a mere 2% of India’s imports in FY22, it rose to approximately a quarter of India’s total FY23 imports of 235.52 million tonne.

Puri said that India’s oil import sources have broadened, with imports now sourced from 39 countries.

Highlighting global oil price volatility, especially after Russia’s invasion of Ukraine and conflict in the Middle East, Puri cautioned oil producers against deep cuts amid ongoing geopolitical tensions.

“You don’t want to take it so high that the demand collapses because it goes into recession. And you also don’t want to keep the prices so low that you don’t get a return...There are other problems in global economy. There a conflicts in some parts of the world which are very directly and intimately related to the energy supply routes, you have to be very cautious. It is in everyone’s interest that you allow healthy recovery of the the global economy to take place,” he said.

Saudi Arabia and Russia have maintained production cuts to bolster oil prices. Both nations extended voluntary cuts into 2023, beyond an already declared 1.66 million bpd reduction in April.