India unlikely to be impacted by price cap on Russian oil

Even as the Group of Seven countries imposed a price cap of $60 per barrel on Russian oil, Indian policymakers are not overtly worried. India is currently buying Russian crude oil at about 40 per cent discount. Even as the price cap kicks in from tomorrow, India’s oil imports from Russia are not likely to be impacted.

While Russia is not happy with the price cap, several other European nations, currently struggling with a deteriorating economic situation, have said that the price cap is too high.

The New York Times said that there are serious questions over whether such a plan can be enforced, and whether Russia and its main buyers, including China and India, will go along with the price set by the Group of 7 industrialized nations.

Sources said that India will continue to import Russian oil. “We are not likely to be impacted by the price cap but the geopolitics have to be handled,” one of them said.

Moscow continues to be India’s primary crude supplier ahead of Iraq and Saudi Arabia.

Meanwhile, Ukraine has said that the price cap at $60 is high.

Last month, US Treasury Secretary Janet Yellen, who was in India said that the US does not have a problem with New Delhi if it continues to buy discounted oil from Russia. India has maintained that it will be guided by its strategic autonomy.

“Russian oil is going to be selling at bargain prices and we’re happy to have India get that bargain or Africa or China. It’s fine,” Yellen had said.

Besides oil, India’s imports of fertiliser from Russia have also increased.

Russia for the first time became the biggest fertilizer supplier to India during the first half of the current financial year by offering discounts over prevailing global prices, cornering more than a fifth of the market share.

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