India may exceed G-7 cap to buy Russian crude oil if OPEC+ cuts raise costs

India may explore the possibility of buying Russian crude oil beyond the G-7 price cap of USD 60 per barrel if the recent output cuts by OPEC+ countries lead to an increase in prices.

In a recent interview with Bloomberg, Union Finance Minister Nirmala Sitharaman made this statement. She emphasized the need for India to constantly re-evaluate its options to get the best deal on oil, which is a critical input for the economy. With India importing almost 80 percent of all its oil consumption, it becomes necessary for the country to look for affordable prices that can benefit its large population, she added.

Replying to a question, she said, ‘The move to get Russian oil is at a time when prices were moving upwards. We import almost 80 percent of all that we consume. So we will have to constantly refigure where we get the best deal because for us it is a very critical input for the economy. We have a large population and we also therefore have to look as you know, prices which are going to be affordable for us’.

Recently, OPEC+ countries including Saudi Arabia announced output cuts of around 1.16 million barrels per day. In February, the alliance produced nearly two million barrels below its supply target.

For India, it becomes essential to look for options to get oil at a lower price point. Buying Russian crude oil beyond the G-7 price cap could be one such option.