India is not keen on joining the United States backed G7 initiative to cap the prices of Russian crude oil.
Finance Ministers of G7 countries led by the US had in September proposed that oil-related service providers may only be allowed to deal in Russian seaborne oil and petroleum products at a price cap.
India, which is currently the world’s third largest crude oil importer, is reluctant to join the initiative against Russia, as it continues to get deep discount on oil cargoes from Moscow, Livemint reported citing people aware of the matter.
The G7 move to impose a price cap on the Russian crude oil comes amid efforts to reduce Russia’s revenue to counter its advances in Ukraine war, with minimum impact on the global energy crisis.
However, Russia has warned that it will stop oil supplies to any country that joins G7 countries’ price cap plan.
Russia, which has never been a major oil supplier to India, emerged as the third largest supplier to New Delhi in FY23, as it snapped up supplies shunned by many countries over Moscow’s invasion of Ukraine.
India is mostly dependent on imports to fulfil its domestic requirement. Around 85 per cent of India’s oil demand is met by importing crude oil.
The surge in oil prices have emerged as a major concern for emerging economies like India.
The price cap proposal also comes against the backdrop of a 2 million barrels per day output cut by the Organization of the Petroleum Exporting Countries (OPEC) and allies at a time of record high fuel prices in India.
At present, India gets Russian oil at an average discount of around $15-20 per barrel on a delivered-at-place (DAP) basis.
With the Russian threat of snapping oil supplies, India will likely stay put and continue to purchase crude oil from Moscow in a bid to balance its interests amid international turmoil.