India 'caught over a barrel' amid Gulf energy crisis, says Tharoor

Shashi Tharoor warns the West Asia conflict's disruption of Gulf energy supplies will have a knock-on effect on India's economy. He says India is 'caught over a barrel' and urges diversifying energy sources and seeking more trade pacts.

Disruption in energy supplies from Gulf region due to West Asia conflict and the rise in international crude prices will have knock on effect on the economy, Congress leader Shashi Tharoor has said and emphasised that India needs to diversify its energy sources and have more trade agreements to deal with the impact.

In an interview with ANI, Tharoor also said that if the conflict with Israel and the US on one side and Iran on the other, goes on for long time, "we don't have a whole lot of options". This round of conflict started on February 28.

Economic Disruptions and Supply Shortages

"I think what we need to do is we can diversify sources of supply as long as the war lasts, as long as there is a shortage in the world markets. We can also, in the broader sense, have more free trade agreements with other countries, so we can have our exports going to a wider variety of countries on better terms than has been the case so far. For this particular crisis, we are, as the expression goes, caught over a barrel, as are many other countries. We don't have a whole lot of options to cope with this if it drags on much longer," he said.

Tharoor, who is also Chairman of Parliamentary Standing Committee on External Affairs, noted that oil, petrol, diesel, LNG, and LPG shipments from Gulf countries, which supply 60-80 per cent of India's gas needs, are now arriving in limited quantities and there are disruptions in kitchens, restaurants, and businesses.

"There have been tremendous disruptions, particularly of the economy, because if you look at the fact that so many oil and gas supplies have been affected. Oil, petrol, and diesel are coming from the oil-producing countries of the Gulf. Gas, something like 80 per cent, I think about it around 60 to 80 per cent of our LNG, LPG is coming from Qatar and the other countries in that region, and we are not able to receive it anymore, except in very small instalments. A couple of ships come, that's one and a half days' supply. So we are not able, as a result, to be able to fuel our kitchens, our dhabas, our restaurants. You're seeing stories from all over the country now," Tharoor said.

"So there is a genuine problem...it's affecting all of us. Secondly, there is a knock-on effect for all economic activity. If factories start slowing down, that affects employment, that affects purchases," he added.

Surging Crude Prices and Petrol Inflation

Tharoor said that crude oil prices have surged from USD 64 a barrel at the start of the West Asia conflict to between USD 100 and USD 120 and there can be a serious situation of "petrol inflation".

"You find that oil prices have shot up. It was USD 64 a barrel for crude oil when the war began. Today, it's been alternating between USD 100 and USD 120. We're looking at a very serious situation of petrol inflation, which in turn has a knock-on effect on everything that is transported by petrol. We've been allowed, in terms of the sanctions being lifted on those Indian companies that are buying Russian oil. That means we can buy more Russian oil. And we are buying a lot of Russian oil. But that is not a solution yet on the gas front," Tharoor said.

Call for Diplomatic Action and India's Stance

Tharoor earlier said that India should take a lead in trying to end the West Asia conflict. He said that the continuation of conflict will create severe shortages and major world leaders should take responsible steps to try and stop the war.

India said on Thursday that the recent attacks against energy installations in different locations across the Gulf region are deeply disturbing and only serve to further destabilise an already uncertain energy scenario for the whole world.

India Explores All Options for Energy Security

In response to media queries regarding attacks against energy infrastructure in the Gulf region in the last few days, MEA Spokesperson Randhir Jaiswal said that attacks against civilian infrastructure, including energy infrastructure, are unacceptable and need to cease.

"India had previously called for the avoidance of targeting civilian infrastructure, including energy infrastructure, across the region. Recent attacks against energy installations in different locations across this region are therefore deeply disturbing and only serve to further destabilise an already uncertain energy scenario for the whole world. Such attacks are unacceptable and need to cease," he said.

Answering queries during weekly media briefing, Jaiswal said India is trying to buy LPG from everywhere and if it is available from Russia, the option would be exercised. He said India wants to have a wide range of options and is buying oil from various sources, including Russia.

"We're trying to buy LPG from everywhere, wherever it's available. So if Russia is available, we'll go there too. Because the current situation is such that we have to ensure that our people's fuel needs are met... I can say that we want to have a wide range of options," Jaiswal said.

He said India has continuously emphasised that one of its priorities has been the need to ensure unimpeded transit of goods and energy."We have also called for the avoidance of targeting civilian infrastructure, including energy infrastructure, across the region. We believe that these are priorities of a large part of the global community since the impact of the conflict is being felt globally," he said. (ANI)

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