Oil prices would double if India didn't trade with Russia, energy minister says

• Global crude would hit $150 if India bought more from the Middle East than from Russia, Hardeep Singh Puri told CNBC.
• "The world is grateful to India for buying Russia's oil," the petroleum and natural gas minister said.

Inflows of Russian crude into India are keeping global oil prices from surging, India's Minister of Petroleum and Natural Gas said.

"If India, instead of buying Russian oil, we start buying more of the Middle Eastern oil, oil prices will not be at $75 or $76; it will be $150," Hardeep Singh Puri told CNBC during the India Energy Week conference.

He pushed back on criticism that the country's continued trade with Russia supports Moscow's war in Ukraine, noting that Indian oil companies will snap up the cheapest crude available, with no attention paid to politics.

That's likely why discounted Russian barrels made up an all-time high among India's crude imports last year, while flows from the Middle East, a traditional source of trade, hit a record low.

"The world is grateful to India for buying Russia's oil," Puri noted.

Wild price swings defined crude markets in the latter half of 2023, as production cuts from the OPEC coalition fueled fears that oil prices would eventually breach triple digits. The Israel-Hamas war only added to tensions, while attacks on Red Sea shipping lanes added pressure to the oil trade.

But the US' blowout crude production last year has kept prices from rising, dampened further by falling demand and China's economic slowdown. In fact, economists have suggested that geopolitical turmoil is the only factor supporting current price levels — crude would otherwise stand at an estimated $70.

Although Puri dismissed the political undertones of trading with Russia, Western measures against Moscow have had some impact on India's imports.

After Indian refineries took on larger inflows of Saudi oil in January, the minister blamed it on Moscow's failure to comply with the $60 price cap on its exports. The sanction was placed on Russia after its invasion of Ukraine.

"When Russian prices don't conform, we buy from Iraq, the UAE, Saudi Arabia," Puri said at the time.