US Clarifies Stance: India Can Buy Discounted Russian Oil

Navigating Sanctions: US and India Discuss Oil Trade

by Victor Adetimilehin

The United States has clarified its position on India’s purchases of Russian oil, stating that they have not asked India to cut back on these imports. This clarification comes amidst ongoing efforts by the West to sanction Russia’s oil exports in response to the war in Ukraine.

US Seeks to Limit Russia’s Revenue, Not Disrupt Oil Supply

American officials explained that the goal of Western sanctions and the G7 price cap of $60 per barrel on Russian oil is to limit Russia’s revenue from oil sales, not to disrupt the global oil supply. Eric Van Nostrand, acting U.S. Treasury assistant secretary for economic policy, emphasized the importance of maintaining stable oil supplies while financially pressuring Russia.

According to US officials, India has several options for purchasing Russian oil under the current sanctions regime. India can continue to buy Russian oil at discounted prices, as long as they do not use Western shipping, insurance, and brokerage services. This approach would limit the revenue Russia receives from these sales.

G7 Prepared to Review Price Cap

The G7 nations, along with the European Union and Australia, are willing to review the $60 per barrel price cap on Russian oil. This flexibility allows for adjustments based on changing market conditions and other factors.

The US has imposed sanctions on specific Russian shipping entities, including state-owned shipper Sovcomflot and 14 of its oil tankers. These sanctions aim to further restrict Russia’s ability to export oil. However, US officials clarified that refined products made from Russian oil are not subject to sanctions once they are processed in another country.

The US and India are collaborating on measures to combat money laundering and terrorist financing. Discussions are also ongoing regarding the implementation of the G7 price cap mechanism on Russian oil.

Source: Reuters

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