Updated April 4th, 2024 at 18:21 IST

US Treasury officials urge India to uphold Russian oil price cap

The oil cap prohibits the use of Western maritime services for tankers transporting Russian oil priced at or above $60 per barrel.

Reported by: Business Desk
Russian oil price cap | Image:Russian Prez Putin, Indian PM Modi, US Prez Biden
Advertisement

Russian oil price cap: Two senior US Treasury officials, who are currently in India urge New Delhi to maintain the oil price cap, aimed at curbing profits to Russia while ensuring stability in global energy markets, as per an official announcement.

Anna Morris, Acting Assistant Secretary for Terrorist Financing, and Eric Van Nostrand, PDO Assistant Secretary for Economic Policy, are scheduled to visit New Delhi and Mumbai from April 2-5 to engage with government and private sector representatives, stated the Treasury in a release on Wednesday.

Advertisement

Their agenda includes discussions on vital bilateral matters, such as cooperation on anti-money laundering and countering the financing of terrorism, as well as other illicit finance issues. Additionally, the focus remains on the sustained implementation of the price cap, which aims to further restrict profits Russia obtains to finance its unlawful invasion, while also ensuring stability in global energy markets.

Since Russia's invasion of Ukraine in February 2022, the G7 nations, the European Union, and Australia jointly enforced a price cap. This measure prohibits the utilisation of Western maritime services, encompassing insurance, flagging, and transportation, for tankers transporting Russian oil priced at or above $60 per barrel.

Advertisement

In 2023, Russia emerged as India's primary oil supplier. Despite India's robust economic and defense ties with Russia, it has refrained from openly criticising Moscow over its conflict with Ukraine.

Morris and Nostrand are slated to address the price cap and partake in a Q&A session hosted by the Ananta Aspen Centre in New Delhi on Thursday.

Advertisement

As stated in a blog post by Morris and Nostrand last month, the second phase of the price cap continues to fulfill its dual objectives: limiting Russia's oil profits while supporting stability in energy markets, the statement affirmed.

The price of Russian oil has noticeably decreased since the commencement of the second phase. This decline reflects not only the global reduction in oil prices during this period but also a significant widening in the discount Russia receives compared to other global oil suppliers.

Advertisement

Various energy market participants, analysts, and even Russian President Vladimir Putin's own oil czar have linked the increasing discount on Russian oil to the enhanced enforcement activities of the Coalition, evident in the second phase of the price cap. This serves as clear evidence that the second phase is yielding results, the statement highlighted.

The price cap plays a crucial role in maintaining a consistent energy supply to global consumers and businesses, while also empowering key importers like India to negotiate more effectively. Simultaneously, the price cap, coupled with essential sanctions enforcement measures, is diminishing Putin's profits from oil sales.

(With PTI inputs.)

Advertisement

Published April 4th, 2024 at 08:39 IST