Russia will stop oil supply if G7 price cap is imposed, says envoy to India Denis Alipov

The Russian ambassador has declared that stopping the oil supply to the global markets would lead to acute shortages and surging prices. 

Russia has claimed it would stop supplying oil to the global markets when the purposed G7 oil cap is imposed and to those countries, which will implement such a mechanism. The restriction in oil supply will lead to acute supply shortages and surging prices. The statement has been revealed by Denis Alipov, Russian Ambassador to India on Friday. On 2 September 2022, the Group of Seven finance ministers (G7) released a statement that confirmed the implementation of a price cap in the future on Russian-made crude oil and petroleum products. 

Under the proposed measure, the provision of services for the maritime transport of Russian-origin crude oil and petroleum products will be prohibited unless the products are purchased at or below a certain price that is yet to be determined.

The Price cap has received strong support from the European Commission. However, all the 27 European nations have not yet unanimously agreed on the measures.

How will the price cap impact Russia’s economy?

The price cap is intended to establish a basis for the Russian-origin crude oil and petroleum products to be exported by the sea under a capped price. The price cap will achieve the three objectives:

Firstly, it will help to maintain a reliable supply of seaborne-Russian oil to the global market.

The price cap will help to reduce the increasing pressure on the energy crisis. 

Thirdly and the most crucial impact is to reduce the revenues the Russian Federation earns from oil after its own choice of invasion against Ukraine. This has led to an increase in global prices.

The Russian-origin crude oil and petroleum products are purchased above the price cap, then the entities and the individuals of the G7 countries will be prohibited from providing services concerning the maritime transport of the products. The purchase is still allowed.

The list of services will include technical assistance, brokering, reinsurance, and financing although the following has not been confirmed yet.

Addressing a press conference, Alipov said that India would not be associated with the G7 countries in such decisions.

Alipov stated in an interview that he would not believe the nation will pursue its interest if such a step gets implemented. India has taken a careful approach to this idea, and following the drastic decision will not be beneficial to the Indian interest.

He further added that Russia will not follow any steps that would be damaging to their trade.

He opened up regarding the oil price cap saying that if they consider the prices not fair and unacceptable to the country, they would simply stop supplying the oil to global markets and the countries that would join hands with the US in the implementation of the price cap. 

In addition, the impact will be drastic on the global economy. The price cap will give rise to an acute shortage of oil in the global market, and the prices of the oil would surge rapidly.

On President Vladimir Putin’s executive order on the partial mobilization of the Russian military for Ukraine. Alipov has added they are ready to prevent the hostilities as soon as possible but when it will happen is a difficult question to answer currently.

Recently, at an SCO Summit, Narendra Modi addressed Russian President Vladimir Putin stating that this is not an era for war This was the time to tackle the situation with diplomacy, democracy, and talking.

Much attention has been given to India’s Prime minister’s remark as India and Russia share an unbreakable friendship. He has further affirmed that the West uses only those quotes which serve their interests while ignoring other parts.

He added that both the leaders had a comprehensive discussion on energy supplies and fertilizers.

Fertilizer supplies from Russia to India have increased by more than 3 percent in recent years. The country is ready to provide more. He does not know what offers would they direct the exports of oil in India. There are commercial decisions.

Alipov has talked about the delivery of 400 USD dollars of missiles stating that it was not related to the Ukrainian contract.

The deliveries are proceeding according to the schedule. If there are some delays, they do not have any connection with the hostilities going on in Ukraine. It is propaganda initiated by the countries who want to weaken the friendship between the two countries.

The Russian envoy has disclosed that the sale of kamov helicopters was also to be scheduled.

The Russian ambassador has declared that stopping the oil supply to the global markets would lead to acute shortages and surging prices. 

Russia has claimed it would stop supplying oil to the global markets when the purposed G7 oil cap is imposed and to those countries, which will implement such a mechanism. The restriction in oil supply will lead to acute supply shortages and surging prices. The statement has been revealed by Denis Alipov, Russian Ambassador to India on Friday. On 2 September 2022, the Group of Seven finance ministers (G7) released a statement that confirmed the implementation of a price cap in the future on Russian-made crude oil and petroleum products. 

Under the proposed measure, the provision of services for the maritime transport of Russian-origin crude oil and petroleum products will be prohibited unless the products are purchased at or below a certain price that is yet to be determined.

The Price cap has received strong support from the European Commission. However, all the 27 European nations have not yet unanimously agreed on the measures.

How will the price cap impact Russia’s economy?

The price cap is intended to establish a basis for the Russian-origin crude oil and petroleum products to be exported by the sea under a capped price. The price cap will achieve the three objectives:

Firstly, it will help to maintain a reliable supply of seaborne-Russian oil to the global market.

The price cap will help to reduce the increasing pressure on the energy crisis. 

Thirdly and the most crucial impact is to reduce the revenues the Russian Federation earns from oil after its own choice of invasion against Ukraine. This has led to an increase in global prices.

The Russian-origin crude oil and petroleum products are purchased above the price cap, then the entities and the individuals of the G7 countries will be prohibited from providing services concerning the maritime transport of the products. The purchase is still allowed.

The list of services will include technical assistance, brokering, reinsurance, and financing although the following has not been confirmed yet.

Addressing a press conference, Alipov said that India would not be associated with the G7 countries in such decisions.

Alipov stated in an interview that he would not believe the nation will pursue its interest if such a step gets implemented. India has taken a careful approach to this idea, and following the drastic decision will not be beneficial to the Indian interest.

He further added that Russia will not follow any steps that would be damaging to their trade.

He opened up regarding the oil price cap saying that if they consider the prices not fair and unacceptable to the country, they would simply stop supplying the oil to global markets and the countries that would join hands with the US in the implementation of the price cap. 

In addition, the impact will be drastic on the global economy. The price cap will give rise to an acute shortage of oil in the global market, and the prices of the oil would surge rapidly.

On President Vladimir Putin’s executive order on the partial mobilization of the Russian military for Ukraine. Alipov has added they are ready to prevent the hostilities as soon as possible but when it will happen is a difficult question to answer currently.

Recently, at an SCO Summit, Narendra Modi addressed Russian President Vladimir Putin stating that this is not an era for war This was the time to tackle the situation with diplomacy, democracy, and talking.

Much attention has been given to India’s Prime minister’s remark as India and Russia share an unbreakable friendship. He has further affirmed that the West uses only those quotes which serve their interests while ignoring other parts.

He added that both the leaders had a comprehensive discussion on energy supplies and fertilizers.

Fertilizer supplies from Russia to India have increased by more than 3 percent in recent years. The country is ready to provide more. He does not know what offers would they direct the exports of oil in India. There are commercial decisions.

Alipov has talked about the delivery of 400 USD dollars of missiles stating that it was not related to the Ukrainian contract.

The deliveries are proceeding according to the schedule. If there are some delays, they do not have any connection with the hostilities going on in Ukraine. It is propaganda initiated by the countries who want to weaken the friendship between the two countries.

The Russian envoy has disclosed that the sale of kamov helicopters was also to be scheduled.