Ex-RBI governor Raghuram Rajan says India could handle higher oil costs if Russian crude goes off the table, with world prices not much higher than Russian rates.
The “real issue” according to him is not economics but the political optics- A public halt to Russian oil would appear as caving to U.S. pressure, likely stirring backlash at home. Rajan warns that how negotiations are handled is important, and strong pressure from the U.S. could harm the important trust between countries.
How do you think India can manage its energy needs while handling diplomatic relations? Is the market missing how big a role politics plays in commodity trade? What is the possible impact of all of this on oil stocks?