The comments come amid heightened market nervousness after US Senator Lindsey Graham said President Donald Trump had given the green light to a bipartisan bill that could impose tariffs of up to 500% on countries buying Russian oil. The proposed legislation could impact buyers such as India, China and Brazil, over Russia’s war with Ukraine.
Surana explained that sanctions on Russia have evolved in stages and have largely focused on specific entities and assets. Oil, as a commodity, has not been sanctioned, nor has the country as a whole. As a result, India has been importing Russian crude from non-sanctioned entities, with refiners taking decisions based on refinery configuration and techno-economic considerations.On the proposed tariff framework, Surana cautioned against jumping to conclusions. “There are a lot of wordings which we need to interpret properly, and we need to see right now when the tariff is being applied,” he said. “Implementation may be country to country. Implementation may be depending on the goods. Implementation may be dependent on the context in which it is done and when it is done.”
Asked how oil companies would respond if such measures were implemented, Surana said commercial logic would prevail unless there was a clear government directive. “If there is a government directive on that, that we need to follow. But if there is no government directive, then the companies will follow the techno-economic interest. That will be the logic and the pecking order.”MK Surana stressed that refiners cannot impose constraints on themselves. He said companies are expected to act in the best interest of their stakeholders by carrying out a techno-commercial analysis and choosing the crude basket that delivers the best margins. Any restriction on sourcing, he added, can only come through a clear and specific government directive.
Surana also noted that India had historically bought very little Russian oil, largely because high freight costs made it uneconomical. Russian crude became attractive only after deep discounts emerged, which is when Indian refiners increased purchases.
According to Surana, the issue is more about pricing and trade adjustments than availability. “Irrespective of whether we buy from Russia or not Russia, in today’s situation, supply is not a problem at all, because it’s a more supplied market,” Surana said, setting the near-term outlook for crude.
He concluded by placing the current debate in a broader global context. “Oil is an international commodity. It finds its way to some other place,” Surana said. “Overall, it does have its input in the total supply situation, unless you completely block that supply source.”
For full interview, watch accompanying video
