India and Russia should build oil tankers – diplomat

Moscow and New Delhi “should think about the future” in the wake of Western sanctions, India’s ambassador suggests

Moscow and New Delhi should consider jointly building oil-carrying ships and establishing energy insurance companies, India’s ambassador to Russia suggested on Thursday.

Pawan Kapoor’s initiative follows the introduction of a price cap on Russian seaborne oil exports of $60 per barrel imposed by the EU, G7 countries and Australia, which prohibits Western shipping, insurance and re-insurance companies from handling Russian crude cargoes sold above the set price.

Oil supplies to India, which remained Russia’s top importer for three months in a row as of December, have been effectively boosted by Western sanctions, with the country buying crude at a discount. New Delhi has not signed up to the restrictions, which have pushed up freight and insurance costs and led to a shortage of tankers.

READ MORE: Oil price cap will not make a dent in Russia’s revenues – IMF

Speaking at a conference on Russia-India strategic partnership, the diplomat noted that the countries “should think about the future and look at opportunities of ship-building and creating independent logistics network and insurance.”

India, the world’s third biggest oil-consuming and importing nation, is heavily dependent on energy imports. The country buys 85% of its oil, which is converted into petrol and diesel, and roughly half of its natural gas, statistics show. Russia supplied a record 1.17 million barrels of crude a day to New Delhi in December, according to tracking data.

Earlier, Indian oil and gas minister Hardeep Singh Puri said oil does not carry the stigma of any country, and India will continue to pursue an independent policy to ensure its energy security.

Find more stories on economy and finance in TROIB business