The May price cap was proposed to reduce Russian oil revenue and keep the oil on the global market.
The United States has no problem with India buying as much Russian oil as it wishes, even if that price is higher than the one set by the west, Janet Yellen, US Treasury Secretary, said Friday.
On the sidelines of an American-Indian conference to deepen economic ties, the US Treasury Secretary said that India could purchase as much oil from Russia as long as it didn’t use the services, including finance, insurance, and maritime service provided by western allies.
The May price cap was proposed to reduce Russian oil revenues and keep the oil on the global market. The last deadline to apply the price cap is 5 Dec, and details are still being gathered.
“Russia will find it very difficult for them to continue shipping as much oil as they did when the EU stopped buying Russian oil,” Yellen stated, adding that Russia would be looking for buyers, as most people rely on western services.
“Russian oil will be selling at bargain prices, and we’re happy for India or Africa to get that bargain. It’s fine,” Yellen added
Russia rose from 0.2% in March to 22.1% in October as the largest oil supplier to India.
India is the second largest buyer for Russia after China.
These comments by US officials come weeks after India’s Oil Minister stated that India would continue to buy Oil from Russia until it is economically feasible.
Since the outbreak of war in Ukraine, India has been under increasing pressure from the West, particularly the US, to increase its purchase of Russian oil, despite US sanctions.
India, however, has stated that it will buy fuel from countries where it is cheaper and would be open to discussing alternatives with western countries.
In FY22 (April 2021-March 2022), Indian oil imports accounted for 0.2% of all oil. In a recent interview, Hardeep Singh Puri, Oil Minister of India, stated that we still only buy a quarter of the amount Europe purchases in an afternoon.
“We have a moral obligation to our customers. Puri stated that there are 1.34 billion people in the world and that we must ensure they have access to energy, whether it be petrol or diesel.