The G7 price ceiling on Russian oil supplies is reducing the income available to Moscow to finance its invasion of Ukraine, and the mechanism’s efficacy is aided by recent moves by Indian refiners, according to prepared statements by US officials in New Delhi on Thursday.
The US Treasury officials, Eric Van Nostrand, assistant secretary for economic strategy, and Anna Morris, acting assistant secretary for terrorist finance, will deliver the remarks at an event hosted by the Ananta Aspen Centre in New Delhi, the Treasury said on Wednesday.
“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,” according to the officials.
India has been one of the largest buyers of Russian oil after Western sanctions pushed the crude market from Europe to Asia, forcing expenses on Russia for relying on an old “shadow fleet” of tankers to transport it further.
New Delhi has always maintained tight economic and defence relations with Moscow, and it has refrained from condemning Russia for its involvement in the Ukraine conflict. However, the foreign ministers of Ukraine and India said last week that they had agreed to restore trade and
The G7 countries, the European Union, and Australia enacted a price restriction prohibiting the use of Western marine services like insurance, flagging, and transportation when tankers carry Russian oil priced at or above $60 per barrel. Following Russia’s invasion of Ukraine in February 2022, the West enforced the mechanism.
This week, US officials are meeting with Indian government officials and business executives to explore collaboration in anti-money laundering, counter-terrorism funding, and price cap implementation.
Since October, the United States has enforced the price restriction through sanctions, including in February designating Russia’s state-owned shipping business, Sovcomflot (SCF).
According to officials, multinational refiners, notably India’s Reliance Industries, have decided not to buy Russian oil loaded on SCF tankers, aiding the activities against Russia.
Treasury officials will state that international support for these enforcement actions, including the recent decision by private and public refineries to block imports of Sovcomflot ships, supports our efforts.
Authorities will claim that implementing the price ceiling on Russian oil has reduced the price that Russia can collect for its oil on global markets, cutting earnings for its war against Ukraine.
The Treasury estimates that the discount of Russian Ural oil to the Brent international benchmark has widened from about $12-$13 a barrel before October to $18 in January and $17 to $18 in February, the last month for which data is available, officials will say.
Authorities will claim that implementing the price ceiling on Russian oil has reduced the price that Russia can collect for its oil on global markets, cutting earnings for its war against Ukraine.
Officials will say that the Treasury believes that the discount of Russian Ural oil to the Brent international benchmark has grown from roughly $12-$13 a barrel before October to $18 in January and $17 to $18 in February, the final month for which data is available.
Iqra Khan 
Arshad Hussain