India was “very confident” of navigating a planned output cut by the oil producers’ cartel, Opec Plus, Petroleum and Natural Gas Minister Hardeep Singh Puri has said. His remarks, made to the press in Washington DC, where he is on a visit, comes two days after oil cartel Opec Plus, a group led by Saudi Arabia and involving Russia, announced that it would cut production by 2 million barrels per day or 2% of global supply.
“How will this impact India ? We are very confident of being able to navigate through the situation,” Mr. Puri said, adding that when prices go up, energy security and affordability were major concerns, but suggesting that India had been able to manage spikes in energy prices earlier.
On the decision of the OPEC Plus oil cartel to cut production, the minister said that all decisions have intended and unintended consequences and it remained to be seen how this would play out.
He emphasized that the markets were perhaps expecting a one million barrel per day cut in supply, but “large parts of the world” were taken “by some surprise and questions being asked” by the Opec Plus announcement of a 2 million barrels per day cut. Mr. Puri discussed possible dynamics including a rise in energy prices exacerbating the movement towards recession, which would in turn lower demand for oil.
The Opec Plus decision was likely to be “scrutinized very carefully” , Mr. Puri said, indicating that he was therefore being circumspect in his reaction to the announcement.
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On the Group of Seven (G7) advanced price cap on Russian oil, the minister said India was studying the issue “very carefully” and that the topic had come up in his discussions with U.S. government officials in Washington but was not the primary focus of those discussions. The government was also having technical discussions on the subject.
The G7 countries had agreed in September to cap the price of oil, scheduled to start in early December, in a move they say is an effort to curb Russian President Vladimir Putin replenishing his war chest using oil revenues.
The minister said he did not know how the Opec Plus supply cut announced on Thursday was going to impact proposals around oil made prior to the announcement.
“That thinking itself is undergoing a change almost every time, you know, somebody brings it up,” he said.
