India Can Buy All Russian Oil It Wants Outside ‘Price Cap’ But Can’t Use Western Services, US Says
/ Go to the mediabankAn oil pumpjack is seen in Almetyevsk District, Tatarstan, Russia.
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India, the world’s third-largest consumer of oil, relies on imports to meet 85 percent of its requirements. Like most of the Global South, India has witnessed higher than average inflation this year because of high energy and food prices caused by western efforts to phase out Russian energy in the wake of the special military operation in Ukraine.US Treasury Secretary Janet Yellen has said that the US would be happy to have India buy as much Russian oil as it wants once the G7-backed ‘price cap’ kicks in on the condition that New Delhi doesn’t use western insurance, finance or maritime services.
"Russia is going to find it very difficult to continue shipping as much oil as it has done when the EU stops buying Russian oil,” Yellen told Reuters on the sidelines of her meeting with Indian finance minister Nirmala Sitharaman in New Delhi on Friday evening.
The US Treasury Secretary said that most of the international buyers are “reliant” on western services.The G7 bloc of the world’s richest nations and Australia announced a plan to limit the international price of Russian crude through a price cap in September. The proposed cap is scheduled to kick in on 5 December.
EconomyUnited States, Allies Agree on Parameters of Russian Oil Price Cap: Reports4 November, 13:46 GMTUnder the price cap, countries importing Russian oil will have to purchase it at a price which is lower than the international price. The G7 has said that the plan is aimed to deprive Moscow of its revenues in the wake of the special military operation in Ukraine this February.Yellen said last month that the Biden administration was contemplating to cap the price of Russian oil at less than $60 a barrel. Moscow has rejected the plan.The eight rounds of economic sanctions imposed by western governments against Moscow since the launch of the special military operation in Ukraine have exempted Russian oil and gas exports because of the EU’s heavy reliance on them. However, the EU has said it will ban maritime imports of Russian crude by next month.
India’s Burgeoning Energy Partnership With Russia
The G7 plan to introduce a price cap on Russian oil comes against the backdrop of New Delhi’s booming energy ties with Moscow.Energy intelligence firm Vortexa said this month that Russia became India’s largest supplier of crude in October, accounting for 22 percent of New Delhi’s overall oil imports, up from 0.2 percent in the previous fiscal year, Globally, New Delhi has emerged as the biggest importer of Russian crude behind China.The Indian government has said that its crude imports from “time-tested friend” Russia are part of New Delhi’s “inflation management strategy” in view of high energy prices caused by western efforts to phase out Russian energy from the market, which has triggered inflationary pressure in developed and developing nations and hampered post-COVID economic recovery.During his visit to Moscow this week, Indian foreign minister Subrahmanyam Jaishankar wouldn’t give a direct answer to a question on whether New Delhi would abide by the proposed “price cap”, as he praised Moscow for coming through for New Delhi amid high global energy prices.During a joint press conference with Russian foreign minister Sergey Lavrov, Jaishankar said that it was the Indian government’s “fundamental obligation” to ensure that the Indian consumer gets the best access on the “most advantageous terms” to the energy market.
“In that respect, we have quite honestly seen that the India-Russian relationship has worked to our advantage. If it works to my advantage, I would like to keep that going,” Jaishankar stated.
