India unlikely to join G7 push to cap Russian oil prices to counter Putin

India may not be the most excited member of the club planning to cap prices of Russian crude oil, reported Livemint.

Recently, finance ministers of G7 countries led by the US, 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 largest oil importer, is reluctant to join the initiative against Russia, as it continues to receive oil cargoes from Russia at discounted rates.

The move to cap the prices of Russian oil comes amid efforts to reduce Russia’s revenue to counter its advances in Ukraine war, with minimum impact on the global energy crisis.

Russia has already warned countries against joining the G7 initiative. It will snap supplies to all countries that join in.

India, in order to balance its interest amid the international turmoil, will likely stay put and continue to take oil supplies from Russia, said the Livemint report.

In FY2023, Russia emerged as the third-largest supplier of oil to India. Before the Russia-Ukraine conflict, Russia was never India’s major oil supplier.

India is largely dependent on imports to fulfill its energy requirements. India imports as much as 85 per cent of its oil needs and 55 per cent of its natural gas demand.

At present, India gets Russian oil at an average discount of around $15-20 per barrel on a delivered-at-place (DAP) basis.

According to the government data, till August, India imported crude oil worth $11.41 billion from Russia.

The price cap comes at a time when the Organization of the Petroleum Exporting Countries (OPEC) has reduced its output by two million barrels per day. This comes at a time when India is already dealing with record-high fuel prices domestically.