Russian Oil Sanctions Will Not Be Breached: India

India has presently declared that it would not breach the Western sanctions on Russia. The latter includes a price cap of 60 USD imposed on purchases of oil from Moscow. It has been revealed by the people familiar with the matter.

The Governmental authorities have ordered banks and traders to stick to the rules. The people revealed maintaining anonymity because the decision has not been disclosed to be public. Indian officials have not gone on board to say that they will accept and support sanctions about the price cap imposed by the group of seven in Russia.

India has conducted a detailed meeting with the US and other G7 nations among the group of 20 nations, respectively. They have shown their satisfaction with the agreement, as stated by the people familiar with the matter. India and China have come out as the top buyers of Russian oil since the war between Russia and Ukraine took place.

The spokesperson of the government has declined to respond to the text messages.

In the last months, import-dependent India has taken the opportunity provided by the discounted prices of crude oil. It has become a key tool for Prime Minister Narendra Modi to cope with inflation. About a year ago, the South Asian market has no place for Russian oil. Today, on the other hand, the south Asian market has become integral for Mosco, which has displaced other prominent suppliers of crude.

India’s promises to stick to the price cap and to continue purchasing crude from Moscow have come out as a concern as the future flows could be impacted by the financer’s way of beaching sanctions, demanding more information on purchases.

Western countries, under the leadership of the US, have put a price cap of 60 USD per barrel on exports of Russian crude. An effort was made to reduce Kremlin revenues while keeping some oil available on the market.

Previously this month, a senior US official stated that the Biden administration will continue to maintain a check on India’s purchase of Russian oil with government officials. The New Delhi government is purchasing crude below the western price cap.

The relationship between US and India is an integral matter, and while the approach in policies may differ for both nations, they share a commitment to follow the order based on international rules and have respect for territorial integrity and sovereignty. 

Geoffery Pyatt, the US Assistant Secretary of State for Energy Resources, added that the US was satisfied with India’s position on Russian oil purchases, but they valued the ongoing discussions on the subject.

He has even stated that energy security has become an integral part of most bilateral relations.

The senior diplomats have defended the sanctions imposed on Russia and said it was an opportunity for India to negotiate a better price.

US National Security Council spokesperson John Kirby stated that the price cap will help to main a discount on Russian oil, and countries including China and India will be able to bargain in reduction of prices.

The main concept behind the capping of prices was to reduce the revenue of Russia, which is initiating the war in Ukraine. The US diplomats have mentioned that the sanctions are having an impact.

In the last months, India has been purchasing cheap oil and has been refining for Europe and the US. The fuel refined in India has not originated in Russia.

Last month, India shipped approximately 89,000 barrels of gasoline and diesel to New York.

Russian Government’s rejection of the price indicates that the sanctions are having their intended impact:

During the last month, the Putin government has rejected a price cap on the country’s oil reserves imposed by Ukraine’s Western backers. They have threatened to cut off oil supplies to the countries that have backed it.

Australia, the United Kingdom, Canada, Japan, the United Nations, and the other twenty-seven European Union countries have decided to set a price cap for Russian oil. Previously, Russian oil was priced at $60 per barrel.

The changes, along with European Union sanctions on Russian oil shipped by sea, will take effect on Monday.

Dmitry Peskov, the Kremlin’s spokesperson, stated that Russia will monitor the situation before deciding on a specific response, but it will not accept the price increase.

According to Karen Donfried, US Assistant Secretary of State for European and Eurasian Affairs, the US government does not intend to sanction India for its oil purchases from Russia.

Edited by Prakriti Arora