India's Petroleum Minister Reappointed in Modi's Cabinet Amidst Policy Continuity

Key Takeaway

• Hardeep Singh Puri reappointed as India's Petroleum Minister, highlighting his role in diversifying oil imports from Russia.
• Oil prices steady with Brent below $82 and WTI near $78 ahead of key OPEC and energy reports.
• Modi's cabinet retains key ministers like Nirmala Sitharaman (Finance) and Amit Shah (Home), indicating policy continuity.

Modi's Cabinet Appointments

India’s Prime Minister Narendra Modi has reappointed Hardeep Singh Puri as the Minister of Petroleum and Natural Gas for a second consecutive term. This decision underscores the belief that Puri, a former diplomat, is well-suited to manage India's relationships with key oil suppliers such as Saudi Arabia, Russia, and the US. The announcement was made by the Press Information Bureau on Monday.

Puri is among several ministers retained in Modi’s new cabinet, which includes Nirmala Sitharaman as finance minister, Raj Nath Singh as defense minister, and Amit Shah as home minister. Modi, who was sworn in for a third consecutive term on Sunday, has had to share power with alliance partners for the first time due to an electoral setback.

Puri, who joined Modi’s Bharatiya Janata Party in 2014 after retiring from the Indian Foreign Service, was first named petroleum minister in July 2021. During his first term, he played a significant role in reducing India's dependence on traditional Middle Eastern suppliers by increasing the purchase of discounted crude from Russia.

Oil Market Dynamics

Oil prices held steady after experiencing the biggest jump since March, ahead of an OPEC report that will provide insights into the market outlook. Brent crude traded below $82 a barrel after surging 2.5% on Monday, while West Texas Intermediate (WTI) was near $78. The OPEC report will be followed by a Short-Term Energy Outlook from the US and a monthly release from the International Energy Agency.

Crude oil rallied on Monday as traders decided to “buy the dip” following the biggest weekly loss since early May. This selloff was prompted by OPEC+’s decision to restore some supply this year, which led the group to clarify that it could pause or reverse production changes if necessary. Despite concerns about demand and increasing supply from non-OPEC countries, timespreads indicate some degree of strength, with Brent’s three-month spread at $1.40 a barrel in backwardation.

Traders are also closely watching for a Federal Reserve interest-rate decision due on Wednesday. A robust US economy and high inflation have led investors to reduce bets on a near-term pivot by the central bank. Yeap Jun Rong, a market strategist with IG Asia Pte, noted that traders are “looking beyond the higher-for-longer rate narrative from the Fed” and are optimistic about upcoming summer demand.

Key Cabinet Members

Modi’s new cabinet includes several familiar faces from his previous administration. Amit Shah, a close aide of Modi, continues as home minister. Shah has been instrumental in key government decisions, including revoking the autonomy of Jammu and Kashmir and amending the citizenship law. Nirmala Sitharaman remains the finance minister, having overseen significant economic growth and infrastructure spending during her tenure.

Subrahmanyam Jaishankar, a career diplomat, continues as the foreign minister. He has defended India’s relationship with Russia and navigated the country through global tensions. Piyush Goyal, who has been involved in several trade negotiations, remains a key figure in the cabinet. Nitin Gadkari, known for his work in expanding India’s infrastructure, continues to lead the transport ministry.

New faces in the cabinet include J.P. Nadda, the BJP party chief, and Shivraj Singh Chauhan, the former chief minister of Madhya Pradesh. Five new appointees are from the BJP’s coalition partners, reflecting Modi’s need to share power after losing the majority in parliament.