Global energy markets stable despite geopolitical turmoil, says Oil Minister Puri

Global energy markets remain stable with enough supplies to meet demand despite geopolitical upheavals, Oil Minister Hardeep Singh Puri said on Friday as he pitched for both producers and consumers playing a constructive role to ensure a viable and predictable market.

Refusing to be drawn into assessment of crude oil supplies from countries such as Russia or Venezuela, he said extremely low and high prices hurt both producers and consumers, and it was in the overall interest to have a stable and predictable regime.

"The world (in the last one year) has become more exciting, in some ways it has become more challenging. This is challenging in spite of the fact that there is no shortage of energy globally. But there are certain other factors,” Puri said, describing the environment as "rapidly expanding and rapidly changing".

Talking to reporters about the India Energy Week starting in Goa on January 27, he said India has diversified its energy sourcing strategy, with the country now buying crude oil - which is processed in refineries and turned into fuels like petrol and diesel - from 41 countries, up from 27, allowing market dynamics to guide key decisions.

"It also means sometimes navigating through difficult scenarios. We have new suppliers," he said, referring to new supplies coming from countries like Guyana and Suriname.

Without naming Russia, he said, "before February 2022, we had negligible supplies (coming) from one source and then it suddenly went up, went up quite a bit and now it is moderating a little (and in all this) market is a determinant".

India became a big buyer of Russian oil once it was available at a discount, following some countries in Europe and the West shunning it as a means to punish Moscow for its invasion of Ukraine. Russian oil accounted for about 40 per cent of India's oil imports, but a new wave of US sanctions against Russian suppliers has led to a tapering off of purchases.

On energy flows from Venezuela and Iran, Puri said, "Will more energy from Venezuela, Iran come, I don’t know. But I don't see (global supplies) going down no matter what happens in Venezuela or Iran. More and more energy supplies are coming from western hemisphere, Brazil, Surinam, Guyana" which is good for the energy markets.

Puri expressed confidence in energy availability for India: "I don't foresee in the coming period, any shortage of energy. You have to negotiate this, and you have to negotiate good prices, etc."

He emphasised that the traditional divide between energy producers and consumers is outdated. "I believe the old mindset where energy consumers were pitted against energy producers. That is an old mindset. Today I believe both energy producers and energy consumers have a stake in the viability, and the strength and the predictability of the system."

The minister cautioned against extreme price volatility as high prices will kill demand in consuming nations while low prices will lead to drying up of investments in producing oil and gas.

He described the outlook as broadly positive: "Overall picture is very positive. Energy is the lifeline of the economy. Global energy markets are important. Global energy markets are undergoing a change. Global energy markets are stable in spite of those changes..

"There was so much of turmoil, prices didn't go below $60 (per barrel), it didn't shoot up. We are all in this together, consumers and producers. And if we play the game in a constructive way, it is very important that we all put our heads together with a sense of purpose, navigate this forward."