WEF 2024: India's pragmatic policies have helped calm the oil market, says Hardeep Puri

Hardeep Singh Puri, India's Minister of Petroleum & Natural Gas, has a cautiously optimistic outlook in the face of the ongoing tensions in the Red Sea region. In a conversation with CNBC-TV18's Shereen Bhan from the sidelines of the Davos World Economic Forum (WEF), Puri discussed how India's pragmatic policies helped calm the oil market, the country's current position in the global market, and the potential impact of geopolitical developments on prices.

Puri called India's decision to import large quantities of Russian crude oil as pragmatic and value-based. "Up till February 2022, what we imported from the Russian Federation was less than 0.2%, then it went up suddenly before coming down again. But the important thing is, it's a valued relationship. Today, the world is thanking us for buying Russian oil, because otherwise....oil prices would have gone up to 250. So India, through its pragmatic policies, has actually helped calm the market. And I think we're getting credit for that," he noted.

Discussing the situation in the Red Sea, Puri noted that any disruption in global trade routes, such as those in the Red Sea, is a cause for concern. However, he believes there is no need for excessive worry as major global players do not desire an escalation of conflicts. He anticipates that calmer conditions will prevail soon, thanks to the efforts of regional and global stakeholders.

Puri also addressed India's broader energy strategy, particularly in response to global economic challenges. He highlighted significant shifts towards electric vehicles and biofuels, which are changing perceptions about the oil market. Despite recent oil price fluctuations, Puri pointed out the resilience of the market and India's successful efforts in diversifying its oil import sources.

"We've diversified our sources of import from 27 to 39. We import $20 billion of oil from the US. Our oil marketing companies are pretty clear. They will float a tender for supply at the port of importation and we buy from the cheaper source. So I think there's enough oil available in the world. It's only a question of managing this between the producers and the consumers and all the other stakeholders," Puri explained.

In the next 20 years, Puri expects nearly 25% of the growth in energy demand coming from India, surpassing the growth expected from all developed countries combined.