By Nidhi Verma
NEW DELHI (Reuters) -U.S. sanctions on Russia should not affect Moscow’s oil trade with India, Pavel Sorokin, Russia’s first deputy energy minister, said on Tuesday, while adding it was too early to assess the impact of the latest restrictions.
India became the biggest buyer of Russian seaborne oil sold at a discount after Western nations imposed sanctions on Moscow and curtailed their energy purchases in response to Russia’s invasion of Ukraine in 2022.
Last month, Washington imposed further sanctions, targeting Russia’s oil supply chain, causing tanker freight rates to soar as some buyers and ports in China and India avoided ships under sanctions.
“Our relationship with India is based on economic pragmatism,” Sorokin told the India Energy Week conference.
“We believe energy trade shouldn’t be hindered by any politics,” he said.
Sorokin said it was too early to measure the impact of the latest U.S. sanctions.
“You cannot judge about the situation on the basis of a few weeks of data. More time is needed to assess these things, but we believe that constructive relationships will continue to be successful,” he said.
Russian supply to India fell in December and January from levels in the preceding six months.
Indian Oil Corp, the country’s biggest refiner, said last month it faced a potential drop in its Russian oil imports this fiscal year ending March 31, following the latest U.S. sanctions on Moscow.
IOC is buying Russian crude without the involvement of entities under sanctions, Chairman A S Sahney told reporters on the sidelines of the conference on Tuesday.
TRUMP CALL
In an apparent reaction to U.S. President Donald Trump’s calls for the Organization of the Petroleum Exporting Countries to lower oil prices, Sorokin said current oil prices suit producers and consumers.
“Prices… give a decent level of return on reinvestment, and at the same time, they give all consumers visibility, and they give a decent price for consumers to actually plan their businesses and have a proper return on their business where energy is the backbone,” he said.
He also praised OPEC+, the group of leading oil producers and allies, including Russia, for its ability to quickly adapt to challenges.
Sorokin reiterated his view the Western sanctions are illegal and have taken a huge toll on the global economy.
“Tens of billions of dollars have been taken away from developing economies, and they have also increased the cost of capital for everyone in this industry,” he said.
“Sanctions have added an element of uncertainty in a sector like energy where projects have very long lead times.”
He added that Russia has the technology necessary to develop its resources and will continue to be a major global player.
(Reporting by Nidhi Verma additional reporting by Olesya Astakhova; Writing by Florence Tan; Editing by Himani Sarkar, Sonali Paul and Barbara Lewis)
