New Delhi: The United States has not asked India to stop or reduce its oil imports from Russia, nor has it sanctioned any Indian entity for buying and refining crude oil purchased from Moscow since the beginning of its war with Ukraine, according to two senior Biden administration officials who are currently in India to visit their government and private sector counterparts.
Acting Assistant Secretary for Terrorist Financing Anna Morris and PDO Assistant Secretary for Economic Policy Eric Van Nostrand are travelling to New Delhi and Mumbai from April 2 to 5. They will urge India to maintain the implementation of the oil price cap aimed at limiting profits to Russia while promoting stable global energy markets, according to the White House.
"There is no restriction, we have not asked India to reduce Russian oil buying...Not dictating that no trade can be done with Russia," Morris said while responding to a query at the Ananta Centre in the national capital. She also said once the Russian oil is refined it is technically no longer Russian oil.
India's decision to implement price cap lauded
In the same event, the Assistant Secretary for Economic Policy, Eric Van Nostrand, hailed India's decision to implement price cap on Russian oil and acknowledged India's position in the Russian oil trade, saying that the decision made Russia sell oil at discounted rates to other countries, including India.
"We know that the Indian economy has much at stake in the Russian oil trade, and has much at stake from the global supply disruptions that the price cap is designed to avoid. The price cap's goals are to limit Putin's revenue and maintain global oil supply--essentially by creating a mechanism for India and other partners to access Russian oil at discounted prices," he said.
This comes after the US Department of Treasury issued a statement regarding the price cap on Russian oil in February this year, saying that the G7, the European Union and Australia have agreed to prohibit the import of crude oil and petroleum products of Russian origin. "The price cap is intended to maintain a reliable supply of crude oil and petroleum products to the global market while reducing the revenues the Russian Federation earns from oil after its own war of choice against Ukraine inflated global energy prices," it added.
Why is the price cap for oil important?
Following Russia's February 2022 invasion of Ukraine, the G7 nations, the European Union, and Australia jointly implemented a price cap. This cap prohibits the utilisation of Western maritime services, including insurance, flagging, and transportation, for tankers transporting Russian oil priced at or above $60 per barrel.
As Morris and Nostrand noted in a blog post last month, the second phase of the price cap continues to achieve its twin goals: restricting Russia’s oil profits, while supporting energy market stability, the statement said. “The price at which Russia sells its oil has declined markedly since the second phase began; the shift reflects the effects of reduced oil prices globally over this period, but also a significant widening in the discount Russia earns relative to other global oil suppliers,” it said.
Energy market participants, analysts, and even Russian President Vladimir Putin’s own oil czar have linked the rising discount on Russian oil to the Coalition’s increased enforcement activities reflected in the second phase of the price cap — clear evidence that this second phase is working, the statement said.
(with inputs from ANI)
