US avers G7 price cap on Russian oil ‘will benefit India’ with access to affordable energy
In a major development, the United States announced to soon convene a meeting of Group of Seven (G7) nations in order to invoke a price cap on Russian oil.
In a major development, the United States announced to soon convene a meeting of Group of Seven (G7) nations in order to invoke a price cap on Russian oil. According to top US officials, the move will benefit India even if it does not join the price cap mechanism directly. US Treasury Department’s assistant secretary for terrorist financing and financial crimes,
Elizabeth Rosenberg said that New Delhi will have access to lower prices of affordable Russian energy. “India will have access to lower prices 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,” he said. “We will not allow Russia to profit and get a war premium for invading Ukraine,” the US official added.
Further, he informed the media that while deciding on the price cap, the inter-governmental political forum consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States will factor in the cost of production and will give an economic incentive to Russia so that its oil keeps flowing into the markets Notably, the
major announcement came at a time when several countries are facing the worst ever economic crisis amid spiralling energy prices. The price cap policy applies to Russian oil, any service provider from G7 involved in transporting, banking, insurance or any other service will have to attest that Russian oil is purchased below the price cap and has to be compliant.
Russia is seeking a long-term contracts with several countries
“It is not a global cap, it is a G7 cap, we are using G7 reach and influence, in this everyone wins except Russia,” US assistant secretary for economic policy and a counsellor to the secretary of the treasury, Ben Harris told reporters. As per officials, the G7 nations control nearly 90% of insurers and vessels that transport oil and Russia is heavily dependent on it. Furthermore, the US official underscored that Moscow is already accomplishing
long-term contracts with several buyers by giving huge discounts, which means that the price cap mechanism will be working. It is worth mentioning India is highly dependent on export– nearly 80%– and is importing a large amount from Moscow. Despite several requests from the US, New Delhi declined to entertain the request, citing “national interest”.
