India says will monitor US sanctions legislation, will continue buying oil from diversified sources

India will monitor further developments following the passage of sanctions legislation targeting major purchasers of Russian oil and gas, adding that the country will buy oil from diversified sources, keeping the country's energy security in mind, Randhir Jaiswal, official spokesman of the Indian foreign ministry, said Sept 18.

"We have clarified our position several times that when it comes to energy sourcing, it is based on our national interest. Meeting the energy requirements of our 1.4 billion people is an imperative that we have to follow. We will continue to buy energy from diversified sources," Jaiswal said, without mentioning specific countries.

The US House of Representatives on Sept. 16 passedcomprehensive sanctions legislation targeting major purchasers of Russian oil and gas, clearing the way for the law to go to US President Donald Trump for his signature.

The bill, which passed the House 262-159, allows the US president to impose tariffs of up to 100% on goods imported from the five largest importers of Russian crude oil or gas by volume, and includes sanctions for shadow fleet vessels used to evade sanctions. The measure allows the president to waive the sanctions if doing so is in the national interest.

The largest importers of Russian crude in August were India at 1.6 million b/d, China at 1.1 million b/d, Italy at 540,000 b/d, Turkey at 191,000 b/d and the Netherlands at 109,000 b/d, according to data fromS&P Global Commodities at Sea.

Potential implications

Jaiswal said that New Delhi had noted the passage of the legislation and the issue has been discussed at high levels in recent months with various US interlocutors. Its potential implications for not just the bilateral relationship but also the international energy market have been very clearly articulated by the Indian side.

"We have made clear our determination to take all necessary measures to protect our trade and economic interests. The government will work closely with Indian trade and industry bodies to deal with the implications of developments related to the legislation. Our interest in a balanced and mutually beneficial trade relationship with the United States needs no repetition," he added.

Premasish Das, executive director for oil analytics at S&P Global Energy CERA, said that Russian crude remains an important part of India's imports and, given the country's energy security priorities, the government would like to keep its options open on buying Russian crude.

"The key issue now is not the legislation itself, but how it is enforced. If Russian barrels become harder for India to access, I think oil prices could rise as refiners compete more aggressively for alternative supplies. So, the challenge for Washington is to reduce Russian energy revenue without creating a price spike, which it is trying to avoid," Das said.