The US and India have made some progress on price cap talks, according to the US Deputy Treasury Secretary. India has emerged as one of Russia’s largest oil customers as it snaps up discounted barrels. G7 leaders aim to have a price cap in place by December 5, when Europe’s ban on seaborne Russian oil imports takes effect. Loading Something is loading.
The US and India have made some progress on a plan to cap the price of Russian oil, according to US Deputy Treasury Secretary Wally Adeyemo.
G7 leaders aim to have a price cap in place by December 5, when Europe’s ban on seaborne Russian oil imports takes hold. But a price cap’s effectiveness would be limited unless India, which has emerged as one of Russia’s largest oil customers, also participates.
“I had a very constructive conversation with my Indian counterparts about the price cap proposal, but also talked extensively with private sector participants in India as well,” Adeyemo told reporters on Friday, shortly after arriving in New Delhi, according to Reuters.
The comments come after Indian officials have privately expressed reluctance about joining the price cap, fearing that Russia would chose to sell its discounted oil to other countries instead. New Delhi has said a consensus among Russia’s other allies is necessary in order to fully back the proposal, according a report from Bloomberg.
Meanwhile, India slashed its purchases of Russian crude in July for the first time since March in the face of cheaper Saudi oil, Reuters reported.
The price cap plan has grown more urgent as the European ban looms. The G7 is trying to avoid another supply shock and price surge by allowing exemptions to the ban if countries agree to the cap. The aim is to keep oil supplies flowing on global markets while limiting the revenue Russia gets.
“We are very concerned that come December 5… we will be in a place where access to Russian crude will diminish for the world and would potentially lead to higher prices,” Adeyemo said.
A price cap of $40-$60 a barrel was reportedly floated earlier this year, although analysts have warned that it risks retaliation from Moscow that could spike energy prices even higher.
Deal icon An icon in the shape of a lightning bolt. Keep reading
More: MI Exclusive India Energy Crisis Russian Oil Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.