MODERATOR: Greetings to everyone from the U.S. Department of State’s London International Media Hub. I would like to welcome our participants dialing in from South and Central Asia and around the world for this on-the-record briefing on the impact of the Russian Federation’s unjustified war on global energy issues.
The officials who will speak with us today are Karen Donfried, Assistant Secretary of State for European and Eurasian Affairs, and Geoffrey R. Pyatt, Assistant Secretary of State for Energy Resources. We will have some opening remarks from our speakers and then they will take questions from participating journalists.
I will now turn it over to Assistant Secretary Donfried to begin our opening. Ma’am, the floor is yours.
ASSISTANT SECRETARY DONFRIED: Thanks so much, Liz, and welcome to all of you on the phone. Assistant Secretary Pyatt and I are delighted to be with the London Media Hub and appreciate the opportunity to discuss Ukraine with media outlets in South Asia. I want to start off with just a few comments and then I’ll hand the mic over to Geoff Pyatt, and we’re looking forward to answering your questions.
We are coming up on the one-year anniversary of Russia’s brutal war against Ukraine, and I want to remind everyone on the line about the path that we were pursuing before February 24 of last year. The United States consistently pursued two paths that Russia could choose from. One was dialogue and diplomacy; the other would be Russian escalation and then resulting massive consequences. We and the Ukrainians made sincere efforts to pursue that former path of dialogue and diplomacy, and on February 24 of last year Putin very unfortunately and tragically chose war.
Putin expected a quick victory, but he has consistently underestimated the resolve of the Ukrainian people and their desire and capability to defend their freedom and democracy. Ukraine did nothing to provoke this war, either last February or back in 2014 when Russia first instigated hostilities in Crimea and eastern Ukraine. All of this is completely unjustified and illegal.
That is why the United States has worked so hard with our allies and partners to impose severe costs on Russia. We have imposed sanctions, export controls, visa restrictions to target Putin, his war machine, and his enablers, with one purpose only: to stop this war and prevent Russia from doing this again to another neighbor. Might does not make right.
It’s clear from his actions President Putin has no interest in diplomacy. Russia’s repeated bombardments have hit schools, hospitals, churches, apartment buildings, and critical infrastructure. Russia alone can end this war today. We echo Ukrainian President Zelenskyy’s calls for a just and durable peace, one that recognizes Ukraine’s sovereignty and independence. As my boss, Secretary Blinken, says, if Russia stops fighting, the war ends; if Ukraine stops fighting, Ukraine ends.
The United States will continue to stand united with Ukraine and help it defend itself for as long as it takes. Supporting Ukraine in that goal has been the right thing to do because it is important for all of us that Ukraine win this war against Russian forces. If Putin wins, it would not only be a defeat for Ukraine, but for all of us. It would make the world more dangerous and make us more vulnerable to further Russian aggression. I continue to be inspired by the courage of the people of Ukraine as they defend their country.
President Biden speaks often of the importance of revitalizing our partnership with all of you. He believes deeply that we are stronger together. For example, we welcome India’s support for the people of Ukraine by providing humanitarian assistance and calls by India for an immediate end to Russia’s unprovoked war against Ukraine, including Prime Minister Modi’s assertion that “today’s era is not of war,” and his comments at the November 2022 G20 Summit in Bali calling for dialogue and diplomacy, and India’s leadership role right now in the G20 is commendable.
Since the first days of Russia’s war of aggression against Ukraine, we have had continuous communication about what we can do together to hold Russia to account and impose consequences for its brutal war. Although we do not always share the same policy approaches, we both share a commitment to upholding the international rules-based order that is founded on respect for territorial integrity and sovereignty.
Thanks so much for letting me share those thoughts with you, and I want to turn the floor over to Assistant Secretary Pyatt.
ASSISTANT SECRETARY PYATT: Great. Thank you, Assistant Secretary Donfried. And let me say what a pleasure it is to have this conversation today just before I head back to India this weekend, a little more than 30 years after I first set foot in our embassy in New Delhi, and my first visit to South Asia in my new capacity as assistant secretary for Energy Resources.
The focus of my weeklong trip to Mumbai, Pune, and Delhi is to continue to advance the strategic energy relationship between our countries both on issues of energy security but also the critically important agenda of energy transition, where the United States and India have so much to contribute to each other’s efforts and where India plays a particularly important global role. And I would highlight in particular our focus on the energy and climate issues around India’s presidency of the G20 and the enormous effort that the United States is putting into our engagement with India around its G20 presidency. In this regard, I should also note I read with great interest the remarks of my old friend and colleague, Minister Hardeep Puri, speaking from Bangalore just yesterday, highlighting the opportunity that the G20 presidency provides for India to play a key role on global energy security, but also to continue our work in the energy transition.
The energy security agenda that India and the United States are pursuing together is particularly important in light of what Vladimir Putin has done over the past year to disrupt global energy markets. By weaponizing Russia’s oil and gas resources and by invading Ukraine, Russia has demonstrated that it will never again be a reliable energy supplier. It also caused a sharp spike in global oil and gas prices, which continue to ripple around the world. And in my travels as assistant secretary, I am constantly reminded that the energy fallout of Russia’s weaponization of its resources is not just a problem in Europe; it’s a problem in South Asia, it’s a problem in East Asia, it’s a problem across the developing world where Russia has sparked a sharp spike in commodity prices, in the cost of fertilizer, and of course the energy inputs that are fundamental to our shared agenda for global economic development.
So I look forward to the conversation but even more look forward to returning to India and seeing so many of my friends both in government but also in the private sector, companies that are deepening their partnerships with the United States every single day, and also in civil society, which plays such an important role in both of our democracies. So thank you.
MODERATOR: Thank you, speakers. We will now begin the question-and-answer portion of today’s call. Our first question is a pre-submitted question, and it comes from Pia Krishnankutty from The Print. Pia asks, “What are your views on India’s role in global oil markets with reports indicating that it is buying large amounts of Russian oil and refining it into fuel for Europe and the United States?”
ASSISTANT SECRETARY PYATT: Thank you for the question. And I should start by maybe explaining a little bit the goals of U.S. policy vis-à-vis Russia’s crude and refined product exports. The goals of U.S. policy and our partners in the G7 price cap coalition are twofold. First of all, to deny Russia to the maximum extent possible the oil and gas resources which go to pay for Russia’s unprovoked and brutal invasion of Ukraine. The second goal, however, is to ensure that we accomplish this first goal with a minimum of disruption to global energy markets. As I noted earlier, global markets were severely disrupted by Russia’s actions, and we recognize that we have a collective interest in a stable and predictable global energy market.
President Biden in his State of the Union last night emphasized America’s commitment to our energy transition, recognizing that the most secure energy of all is renewable, but he also underlined that oil and gas are going to remain a part of our energy mix for years to come. So we need to work through the disruption that is caused by Russia, which before the war was the world’s largest oil and gas exporter, demonstrating that it can no longer be relied upon.
From that perspective, we see the price cap and the implementation of the price cap as an opportunity for countries like India. So even though India is not a participant in the price cap coalition, India has effectively used its negotiating leverage, which it derives from the price cap and the fact that large portions of the global markets are no longer accessible to Russia, to drive down the price that it pays for Russian crude. That is a – that’s a benefit to India, it’s a benefit to the Indian economy, but it also helps to advance our two goals of stabilizing global markets and denying resources to the Kremlin.
MODERATOR: Thank you. If we could next go to Suhasini Haidar from The Hindu.
QUESTION: Thank you so much. I wanted to ask in continuation to the previous question, isn’t it time to acknowledge the sanctions as the U.S. and the EU planned them have just not worked? While 140-odd countries may have joined in condemning Russia’s action at the UNGA, less than 40 countries are actually part of the sanctions. And as the previous question pointed out, India continues to buy close to multiples of the oil that they used to. From about 40,000 barrels a day, I think it’s close 1.27 million barrels a day now. So how do you explain this inability of the U.S. and its allies to get people on board with the sanctions?
ASSISTANT SECRETARY PYATT: Suhasini, this is Geoff again. Wonderful to hear from you.
QUESTION: Hi.
ASSISTANT SECRETARY PYATT: I will make a couple of points. First of all, I would encourage you to take a careful look at some of the analysis of the International Energy Agency and their reporting, which lays out the considerable losses that Russia is suffering as a result of its weaponization of energy and makes the observation that by the end of this decade, by 2030, Russia’s oil and gas resources will have declined by 50 percent. That is an extraordinary blow to an economy that has depended on oil and gas to keep its national budget afloat.
As I tried to explain in my earlier answer, we do not believe that our policy – our sanctions policy in the energy space needs to have universal adherence in order be effective and to achieve what I described as our two goals. So we are – we are comfortable with the approach that India has taken, but, more importantly, we value the very intensive dialogue that we have with the Government of India around these issues. And we are already seeing the results of our collective efforts in the budget deficits that Russia has reported.
And this leaves aside the larger question, which the IEA data alludes to, which is the exit of critical oil and gas services providers, companies like Baker Hughes and Halliburton which have withdrawn from the Russian market because of Russia’s invasion of Ukraine, and that will deny Russia the ability to continue developing and exploiting its fields. And then I would also draw attention again to the great impact from the decoupling between Europe and Russia on energy supplies. Europe has gone to zero on coal purchases, Europe has gone to zero on purchases of Russian crude and refined product, and Europe has dramatically reduced its imports of Russian gas.
All of which means that Vladimir Putin, because of his invasion of Ukraine and because of his invasion of – his weaponization of energy, has lost what has traditionally been Russia’s most valued and valuable market for its oil and gas resources. So we see Russia’s oil and gas industry as being in irreversible decline as a consequence of the brutal invasion that Russia has engaged in, which, as Assistant Secretary Donfried emphasized, was completely avoidable – was a unilateral action which we and many other international partners, including India, wish very much the Kremlin had not engaged in. But now that the die is cast, the consequences are being felt.
ASSISTANT SECRETARY DONFRIED: And if I can just jump in here, I would note that from where we sit, we do think the sanctions and export controls are having an impact. We often talk about the unprecedented nature of the sanctions, and this is the first time, for example, that we have ever sanctioned the central bank of a G20 country. If you look at the export control part of the equation, there’s no question in our minds that those have had a direct impact on Russia’s defense industry and Russia’s ability to produce the weapons of war it was using in Ukraine.
And then just the third and final point I’d make is sanctions and export controls also become more powerful over time, and so we are seeing the compounding impact of those punitive measures. So our sense is that what we are doing on sanctions and exports – on sanctions and export control is a very important part of the overall package that we have put in place to ensure that Russia does suffer a strategic defeat in Ukraine. Thank you.
MODERATOR: Next, if we could go to Abhishek Jha from CNN-News18.
OPERATOR: Abhishek, your line is —
QUESTION: Hi, this is Abhishek Jha from CNN-News18. Yes, yes, yes, very good. I’ve got a question, is that you have been constantly (inaudible) Russian oil that India has been buying inside Russia and become the single largest importer of crude as far as India. And Indian minister (inaudible) said that —
ASSISTANT SECRETARY PYATT: Abhishek?
QUESTION: — we will buy —
ASSISTANT SECRETARY PYATT: Abhishek?
QUESTION: Hello?
ASSISTANT SECRETARY PYATT: Abhishek, could you – Abhishek, could you repeat the question? We can’t hear you here in Washington.
QUESTION: Okay. Okay. Sorry, sir. So my question is, sir, as India has become one of the largest importers of (inaudible) Russia has become the largest exporter of crude oil in terms of India’s (inaudible) and Indian petroleum minister has said that we will buy oil from wherever we have when it comes to the right India has to make the best of the deals. Also, there has been that USA has different sanctions and has squeezed the global oil market and it doesn’t have a lot of options where it can negotiate a good deal for its 1.3 billion people (inaudible). So what are the things that USA and its allies (inaudible) in order to have a global oil market where India can actually be able to buy at a fair price and it does not have to buy from Russia (inaudible)? Thanks.
ASSISTANT SECRETARY PYATT: Thank you, Abhishek. I think if I heard your question correctly, I would point to a couple of things. First of all, I won’t repeat my points on the goals of the price cap coalition, but I will repeat the point I made about President Biden’s remarks yesterday in the State of the Union and the United States commitment working with our producers to ensure that our oil and gas resources are made available to global markets to help stabilize the disruption that Vladimir Putin has caused.
So, for instance, U.S. crude production is expected to continue to grow, reaching a new record in 2024. You can also look at the very important role of U.S. LNG, and I recognize the critical role which Minister Puri also alluded to that LNG plays in India’s plans for reducing the carbon footprint of its energy infrastructure. The United States is one of the world’s two largest LNG exporters at this point, along with Qatar. We expect to retain that role for years to come, and we appreciate very much the partnerships that have emerged between purchasers in India and many other parts of Asia who have looked to the United States as a reliable source of supply.
I should note in this regard also – and one issue that helps to frame my upcoming visit to India is our commitment to the Quad. And I had a very similar India – a very similar energy conversation in December, in Tokyo, in which we had a very intensive discussion of the shared interests between Japan and the United States in the areas of energy security, energy transition, and climate. And I see my visit to India and the conversations in New Delhi as very much a complement to that larger agenda.
As Minister Puri said so well in Bangalore, we have a shared interest both in stabilizing global markets, in making sure that energy resources are available to help propel our economies, and in doing so in a way that minimizes the carbon footprint of that energy.
I would note in this regard that last year, India was one of the top 10 markets for U.S. LNG, and if we look at what our LNG members look like, U.S. exports were up 9 percent in 2022 over 2021 and they were double from their level in 2019, pre-pandemic.
So thank you for the question.
MODERATOR: Next if we could go to Shashank Mattoo from The Mint.
QUESTION: Thank you very much, Assistant Secretaries Donfried and Pyatt, for your time. A recent reportage, especially in The Economist, seems to suggest, as it is (inaudible), that the oil price cap the G7 imposed on Russia is currently being undercut by oil sales to India and China. Secretary Pyatt specifically mentioned – Assistant Secretary Pyatt mentioned that there were – this piece specifically mentions that discounts that the Americans and the West have largely hoped to materialize have not happened, and the volumes of oil sales from Russia to India have also exceeded expectations. My first – the first part of my question is: Can you comment on the specific reportage in that piece in The Economist that seems to have said the oil price cap scheme is being undercut?
But secondly, something that’s caught attention here in India is that a senior Ukrainian lawmaker who’s in fact head of the parliamentary foreign affairs committee in Ukraine suggested that India should be sanctioned if it continued to purchase Russian oil. Just your sense of what that represents for India’s wider relationship with the West and in Ukraine. I believe he made those comments while he was in Washington. Thank you for your time.
ASSISTANT SECRETARY PYATT: Shashank, let me ask Assistant Secretary Donfried to field the second question. But on the first one, what I would emphasize is our very strong conclusion, including by our best global market experts at the Treasury, that the price cap coalition is working. The price cap is having the intended effect, and you only need to look at the dramatic spread between the Urals price of crude oil today and the global market price to see that we are achieving our goal of minimizing the resources which Russia receives for its oil.
I have a better appreciation than most, I think, of the extraordinary refining capacity that India possesses. As Suhasini will remember, I had the opportunity while I was DCM to actually visit Jamnagar and the extraordinary Reliance refining complex there in Gujarat. It’s only natural that India should seek to leverage that refining capacity to supply global markets, but we welcome the fact that India is doing so in a way that advances our goal of denying resources to the Russian Federation, which, as I’ve said earlier, Vladimir Putin uses to pay for the brutal attacks that we’re seeing on Ukrainian civilians, the destruction of apartment buildings, the missile strikes on energy infrastructure, and Russia’s attempt to weaponize the winter among Ukrainian citizens who merely sought to exercise their own sovereign choice about the future of their country.
ASSISTANT SECRETARY DONFRIED: Thanks, Geoff. And just on your second question, I want to be clear we are not looking to sanction India, and our partnership with India is one of our most consequential relationships. Thanks so much.
MODERATOR: We have time for one more question, so we’ll go to Geeta Mohan from India Today.
OPERATOR: Geeta, your line is open.
QUESTION: Hi. Yes, I was unmuting myself. Hi, Geoff. Just wanted to know in terms of alternatives when we’re looking at energy resources – and the United States of America is or has promised partners and allies some sort of energy security – what are the conversations, what are the areas, countries that you’re in conversation with to find alternative sources of energy to replace Russia? One. And secondly, what’s the conversation and where are you at when it comes to Venezuela?
ASSISTANT SECRETARY PYATT: Very good questions. Let me emphasize – I mean, one of the countries that we’re talking to of course is India, and I have a very good conversation last week with your ambassador here in Washington ahead of my trip, and I emphasized – and we both emphasized – our shared hope that my visit can be useful in preparing for the G20 summit and our boss, Secretary Blinken’s travel to India, in a way that brings together the various stovepipes of our energy cooperation. What we do on oil and gas. What we do on civil nuclear. What we are doing and can do in the future on supply chains for green technology where India has such an important role to play in areas like the manufacture of solar cells, of electrolyzers for green hydrogen. The way in which we work together – the way in which we can work together on cutting-edge technology for new methods of battery storage.
We place great importance on Prime Minister Modi’s commitment to India’s very ambitious energy transition goals, and we see a natural synergy between big Indian industrial groups who are active in this area and American companies. That’s why I’m starting my trip in Mumbai. That’s why I’m going to Pune to visit with – visit with GE and GE’s wind power manufacturing facility, and that will be a constant thread through my discussions with government when I get to New Delhi. So we are having this conversation with India, with Japan – I already alluded to – with key partners and allies around the world.
I think one of the reasons that this trip was so important to me is because I have discovered in my first half-year in this job that India is – that energy is an issue that figures in almost all of our strategic bilateral relationships today, and Assistant Secretary Donfried can talk about our various conversations with European allies and partners. Every European foreign minister who comes to Washington these days has one form or another of energy issues on their plate.
And the agenda is very much, as President Biden said in the State of the Union and very much as Minister Puri said in his remarks in Bangalore, to walk and chew gum at the same time, as we would say in the United States. Both to address the critical issues of energy security – and I want to come back to the blame for this: this disruption of global energy markets is the consequence of one man in the Kremlin and the actions that Vladimir Putin took to weaponize his oil and gas resources, first against Europe but now against the world – but also to continue to work as ambitiously and as rapidly as we possibly can to address the climate crisis, to mobilize our scientists and our laboratories and our companies and our investors to build the new technologies that will be so important to achieving the sustainable energy system that our collective future depends upon.
Having spent so much of my career investing in the strategic relationship with India in four different jobs, I see our energy partnership as absolutely essential to the larger strategic agenda that President Biden and Secretary Blinken and National Security Advisor Sullivan and so many others across our administration has sought to pursue. I’m very, very optimistic about the opportunities we have as we look to the future.
MODERATOR: And that concludes today’s call. I’m sorry that we could not get to all questions today. I would like to thank Assistant Secretary Donfried and Assistant Secretary Pyatt for joining us, and I would like to thank all of our callers for participating. If you have any questions about today’s call, you may contact the London International Media Hub at MediaHubLondon@state.gov.
ASSISTANT SECRETARY PYATT: Great.
ASSISTANT SECRETARY DONFRIED: Thanks so much.
ASSISTANT SECRETARY PYATT: Yeah.
ASSISTANT DONFRIED: Bye-bye.
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