The government does not expect any disruption to Russian oil supply in the next two months, given that US-sanctioned tankers are allowed to deliver crude until March, a senior official said on Monday.
“Because there is a buying period, cargoes which are already in transit will come to us. So you will not see an immediate disruption. In the next two months, we do not anticipate a major problem because ships that are already in transit will come through,” the official said, adding the period of 6-8 weeks is a window for producers as well as buyers to work out alternative arrangements.
The official also noted there is no shortage of oil in the market with countries ramping up their capacities. “We are also seeing additional production coming to the market from other countries. Opec (Organization of the Petroleum Exporting Countries) itself has a lot of spare capacity. Even outside Opec, there is Guyana, US, Canada, Brazil, etc. which also are in position to increase supplies. I do not anticipate oil shortage,” the official said. The official also noted that Russia will look for a way to get its oil to the market.
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The US on Friday imposed sanctions on Russian oil producers Gazprom Neft and Surgutneftegas, along with 183 other vessels that have shipped Russian oil, in order to curb Russia’s revenue used to fund its war with Ukraine.
Addressing a query on how will the latest sanctions affect the country’s supply of Russian oil in the longer term, the official said that of the two entities sanctioned, one was not a big supplier to India and there are other producers who have not been sanctioned.
The official highlighted that Russia could offer deeper discounts for its crude supplies to India to meet the $60 a barrel price cap to continue exports.
Global Brent crude prices touched $81 a barrel on Monday, the highest since August, on concerns over disruption of Russian oil supply to India after the new sanctions.
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“We will not judge the impact of the sanctions based on two day rates (oil prices).
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