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Informist, Monday, Jan. 13, 2025

--Govt sources:May see impact of new US sanctions on Russia oil post 6-8 wks 
--Govt sources: Don't see immediate hit to oil prices from fresh sanctions 
--Govt sources:Price of oil supply may go up marginally on fresh sanctions 
--Govt sources: More output in other mkts to offset drop in Russia supply 
--Govt sources: Don't see oil shortage from fresh US sanctions on Russia 
--Govt sources:Too early to jump to conclusions about US sanctions on Russia 
--Govt sources: See no direct hit to India from fresh US sanctions on Russia 
--Govt sources: Have to gauge long-term impact of US sanctions

NEW DELHI – Amidst apprehensions of a surge in crude oil prices following the fresh sanctions imposed by the US on Russia Friday, senior government officials said India is well-positioned to handle the situation and the sanctions may only push up oil prices marginally. "We don't anticipate any immediate impact on oil prices as deals and shipments are already on the way," one of the officials said. "If anything, it (the impact) will be marginal."

Crude oil prices rallied Monday to a three-month high as the new sanctions on Russia's energy industry threatened to curtail supplies from one of the world's top producers. Irrespective of the slight rise in prices, the official said the situation does not warrant the government and domestic oil companies to be "overly worried" and it was too early to draw any conclusions. "We, along with the industry, are studying what could be the possible impact," the official said. Brent Crude futures traded at around $81 per barrel Monday.

Outgoing US President Joe Biden's administration Friday slapped sanctions on more than 200 entities and individuals, including major Russian oil producers Gazprom Neft and Surgutneftegas, Russian insurance companies, and shadow fleet vessels. "The United States is imposing sanctions today on more than 200 entities and individuals involved in Russia's energy sector and identifying more than 180 vessels as blocked property," Secretary of State Anthony Blinken said. "This wide-ranging, robust action will further constrain revenues from Russia's energy resources and degrade (President Vladimir) Putin's ability to fund his illegal war against Ukraine."

The sanctions have no direct impact on India, another official said. India's huge oil consumption is met primarily through imports, and Russia is one of the top exporters to the country. While the officials said there was no reason to be worried, the second official said there was a possibility that the discounts Russia offered India on oil deals could be taken away. "If the discounts are discontinued, then the supply price will go up a little," the official said.

Beyond the risk of discontinuation of discounts, the first official said sanctions against an insurance company that works with Indian companies could lead to freight insurance charges inching up. "Taking all these individual issues into account, we are studying the long-term impact," the official said, adding that a more pronounced impact of the sanctions may be seen after six to eight weeks when newer deals are negotiated and newer shipments begin.

According to the second official, though oil prices may see some impact, there is no cause for worry on the availability side. "More production in other markets will offset the impact of a drop in supply from Russia, should that happen," the official said.  End

US$1 = INR 86.57

Reported by Priyasmita Dutta

Edited by Rajeev Pai

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