The South Asian nation, which has emerged as one of the biggest buyers of Russian oil since the invasion of Ukraine, has been hesitant to join the scheme unless a consensus is reached with all buyers. Is asking not to be, according to people familiar with the matter. Identified because the deliberations are not public.
The message will likely be conveyed to US Deputy Treasury Secretary Wally Ademo and his team in meetings with Indian government officials and company officials from Wednesday to Friday. His boss, Janet Yellen, and the department have led the Allies’ efforts to bring on a price cap idea, which they predict will starve Russia of revenue that would prevent the invasion of Ukraine without removing oil from the market and causing a price spike. Will fund without trigger.
The effectiveness of the oil-price cap may depend on commitments from major customers such as China and India, which have boosted oil purchases from Russia after most buyers abandoned their barrels following the invasion of Ukraine.
People said Indian policy makers fear that fixing the price cap would hamper its access to discounts on Russian crude. The world’s third-largest buyer, which imports 85% of its oil needs, has relied on cheap Russian supplies to provide relief from inflation and a record trade deficit of close to 7%.
Adeyemo is also expected to ask India to strengthen its surveillance on where products made from Russian crude oil are sold, one of the people said. The request came after Treasury officials flagged that a shipment of materials used to make plastics produced at an Indian refinery from Russian oil had made its way to New York. In March, the US banned imports of Russian crude and refined petroleum products.
Treasury spokesman Michael Kikukawa said Adeyemo is in India to discuss “a number of issues”, including energy security. “All the tools that will be discussed – including the price cap on Russian oil, clean energy technology, climate finance – are aimed at lowering the price of energy in India, the United States and globally,” he said in an email.
Kikukawa did not comment on how Indian officials view the price range. An Indian Finance Ministry spokesperson did not respond to calls seeking comment.
The European Union approved a ban on the import of marine Russian oil at the end of the year, and along with the UK, barred its companies from financing or insuring such shipments. US officials fear these sanctions will lock in large chunks of Russia’s output and push global prices to around $140 a barrel.
Global benchmark Brent oil closed above $100 a barrel on Tuesday for the first time since the beginning of August, although it has recently climbed closer to $140 in March.