Will join Russia oil cap coalition when alternative supply is ensured: Govt

India has said it will consider backing the price cap on Russian crude oil proposed by the US only when it will be assured of supplies from Venezuela and Iran. As India is largely dependent on imported crude, it cannot accept a situation where open market prices increase because of uncertain and restricted supplies, with a limit imposed on cheaper oil sources, reported The Economic Times.

The Joe Biden-led US administration has invited India to join the coalition of Russia’s oil price cap to reduce Moscow’s earnings from crude, which comes in the backdrop of its ongoing invasion of Ukraine.

US deputy treasury secretary Wally Adeyemo, who was in New Delhi last month, said, “If India is part of the coalition, it can have a say in deciding the price cap.”

“How can discussion on cap happen when supply sources are restricted?” a government official told ET, adding, “You can talk about a cap after Venezuela and Iran supplies are available in the market.”

A nuclear deal between the US and Iran is expected this month, a move that will open up crude sales from Tehran, easing global supply pressures. However, the oil supply from Venezuela has been restricted as the US has imposed economic sanctions on the nation.

On Friday, G7 finance ministers agreed to impose the cap to Russia’s oil price and decided to work out the details of the same later. Russia, reacting to this, said it would stop supplies to nations that have decided on the limit.

Russia on Monday said it would indefinitely shut Nord Stream 1 pipelines that supply gas to Europe, a move that spiked oil prices amid shortage fears. As India imports over 85 per cent of its crude demand, high oil prices hits the nation’s economy.

In August, India imported 738,024 barrels per day (bpd) of Russian crude oil, which was 18 per cent lower than in July, and 24 per cent than in June, as per data by Vortexa.

External Affairs Minister S Jaishankar last month said that India is trying to get the “best deal possible for its citizens.”

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor