Singapore – India’s top oil company, Oil and Natural Gas Corporation (ONGC), is making waves by stating that its imports of Russian crude are not just a smart business move but a win-win situation for the global economy. K.C. Ramesh, the executive director of ONGC, shared this perspective during the annual APPEC energy conference held by S&P Global Insights in Singapore.
In the wake of Russia’s invasion of Ukraine in February of the previous year, India’s refiners made a strategic decision to acquire discounted Russian oil. As a result, Moscow swiftly rose to become India’s primary source of crude oil, accounting for approximately 40% of the country’s crude imports.
In response to Russia’s unprovoked war on Ukraine, world powers, including the European Union and the Group of 7, imposed sanctions and restrictions on Russian oil exports. However, India’s economy reaped the benefits of the discounted prices, according to Ramesh.
“The impact on our economy has been significant, aiding in our economic growth, thanks to the very reasonable prices we obtain from Russia,” remarked Ramesh. India’s acquisition of affordable Russian crude has garnered criticism from the West. In May, the EU’s chief diplomat, Josep Borrell, urged the bloc to take measures against India reselling refined Russian oil to Europe.
India, the world’s third-largest energy importer, relies on international markets for over 80% of its crude oil. S&P Global data from July indicates that India primarily sources its crude oil from the Middle East and Russia.
Fereidun Fesharaki, Chairman of the energy consultancy Facts Global Energy, made a poignant observation about India’s resource landscape, saying, “God has given India a lot of things … but no resources. Limited amounts of oil, and limited amounts of gas.”
Despite these constraints, India is actively investing in upstream opportunities within the oil industry. Ramesh revealed ambitious plans for investments in survey and exploration, with around $44 billion earmarked for the next three years. The term “upstream” in the oil and gas industry refers to the exploration and extraction of oil or gas deposits.
“We need fuel, and that’s precisely what we’re aiming for. So, rest assured, investments will be made,” affirmed Ramesh. This move signals India’s determination to secure its energy future and play a pivotal role in the global energy landscape, even as it navigates the complexities of international geopolitics.
