US, India make progress on plan to cap Russian oil price

The US and India made progress on price cap talks, according to Wally Adeyemo, the US Deputy Treasury Secretary. India has emerged as one of Russia’s largest oil customers as it snaps up discounted barrels. The comments come after Indian officials have privately expressed reluctance about joining the price cap, fearing that Russia would chose to sell its discounted oil to other countries instead.

New Delhi has said a consensus among Russia’s other allies is necessary in order to fully back the proposal. G7 leaders aim to have a price cap in place by December 5, when Europe’s ban on seaborne Russian oil imports takes hold. But a price cap’s effectiveness would be limited unless India, which has emerged as one of Russia’s largest oil customers, also participates.

“I had a very constructive conversation with my Indian counterparts about the price cap proposal, but also talked extensively with private sector participants in India as well,” Adeyemo told reporters on Friday, shortly after arriving in New Delhi.

India slashed its purchases of Russian crude in July for the first time since March in the face of cheaper Saudi oil. The price cap plan has grown more urgent as the European ban looms. The G7 is trying to avoid another supply shock and price surge by allowing exemptions to the ban if countries agree to the cap. The ultimate aim is to keep oil supplies flowing on global markets while limiting the revenue Russia gets.