Price cap on Russian oil to benefit India: US
New Delhi, September 9
The US has argued that a price cap on Russian oil, as proposed by the G7 block, will actually benefit India.
“India will have access to lower price of affordable energy (Russian oil). It can leverage the price cap to negotiate a lower price with Russia. It is consistent with a price cap. We will not allow Russia to profit and get a war premium for invading Ukraine,” said US Treasury Department’s Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg.
The G7 plans to soon convene and place a price cap on Russian oil purchases will factor in the cost of production and will give an economic incentive to Russia so that its oil keeps flowing into the markets. The plan, however, can go belly up if Russia refuses to sell its oil. In that scenario, the price of oil could shoot up to $200 a barrel, analysts have warned.
The price cap policy will be on any service provider from G7 involved in transporting, banking, insurance or any other service who will have to attest that Russian oil is purchased below the price cap and has to be compliant. “It is not a global cap, it is G7 cap. We are using G7 reach and influence. In this, everyone wins except Russia,” said US Assistant Secretary for Economic Policy Ben Harris. The G7 nations — Britain, Canada, France, Germany, Italy, Japan and the US — control nearly 90 per cent of insurers and vessels. India has maintained that western restrictions on oil imports cannot work and it is importing Russian oil due to its lower cost, which eases the burden on the domestic economy.
