Page 11 - AsianOil Week 11 2023

AsianOil POLICY AsianOil

India reportedly complies with Western

price cap on Russian oil

INDIA INDIA’S government has instructed the coun- India had a detailed discussion with the US
try’s banks and traders to comply with Western and its allies at the recent G20 meeting on com-
The West is seeking sanctions on Russia, as the US, the EU and its pliance with sanctions, and the latter parties
international backing to allies work to get greater international back- seemed satisfied with its actions, Bloomberg
make its price cap more ing for the measures to boost their effective- reported. Earlier this month, the news agency
effective. ness, Bloomberg reported on March 12 citing cited a senior US official as saying that the Biden
sources. administration would continue to discuss India’s
The EU and G7 imposed a $60 per barrel imports of Russian oil with New Delhi officials,
price cap on Russian oil in December last year but was satisfied that Indian importers were
in an effort to further squeeze Moscow’s reve- acquiring the crude at a price well below the $60
nue stream. But while the Western partners at per barrel threshold.
the same time also introduced an embargo on However, there is a lack of transparency about
Russian oil, India and China have significantly how much Russian oil is actually selling for in
expanded Russian oil imports over the past year Asia. Urals price assessments have traditionally
to take advantage of the steep discount that Urals been based on free-on-board rates at Russia’s
trades at. And it has been unclear to what extent western ports, but it is unclear what surcharges
the two countries have been complying with the may be added to calculate the final price that
price cap. buyers pay for the oil.
In December 2021, two months prior to the Responding to the report that India is abiding
launch of Moscow’s invasion of Ukraine, Rus- by the price cap, the Kremlin on March 13 said
sian crude accounted for a mere 1% of India’s that its policies were guided by contracts with
oil imports. But by January the share had risen Indian buyers and not by news stories. Mos-
to 27%, amounting to an all-time high of 1.4mn cow curtailed its oil production by 500,000 bpd
barrels per day (bpd). That makes Russia India’s this month, stating it was restricting supplies to
biggest oil supplier. countries complying with the price cap. ™

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