Apr 4 2024: The United States Treasury officials clarified that they have not asked India to cut its imports of Russian oil. The focus of sanctions and the G7-imposed $60 per barrel price cap is to maintain stable global oil supplies while reducing Moscow’s revenue, according to Eric Van Nostrand, the U.S. Treasury’s assistant secretary for economic policy.
Key Points:
Stable Oil Supplies: The goal of the sanctions is to keep oil supply stable while limiting Russian President Vladimir Putin’s profit from oil sales.
Price Cap Mechanism: The $60 per barrel price cap imposed by the G7 prohibits the use of Western maritime services for tankers carrying Russian oil priced at or above this level.
Options for Buyers: Buyers can still purchase Russian oil at deeper discounts outside of the price cap mechanism if they avoid Western services like insurance and broking.
Impact of Sanctions: The sanctions aim to restrict Russia’s options to sell oil, either under the price cap, offer discounts to buyers bypassing Western services, or shut down oil wells.
Review of Price Cap: G7 nations have the option to review the price cap based on market conditions or other factors.
Sanctioned Vessels: The United States has imposed sanctions on Russian state-run shipper Sovcomflot (SCF) and 14 of its crude oil tankers involved in Russian oil transportation.
Refined Products: Selling refined products produced from Russian oil to Western nations does not breach sanctions as they are considered imports from the country of purchase, not from Russia.
The US officials are currently in India discussing cooperation on anti-money laundering, countering the financing of terrorism, and the implementation of the price cap with government officials and business leaders.
