India Declines to Commit to US-Proposed Price Cap on Russian Oil

US Deputy Secretary of Treasury Wally Adeyemo held wide-ranging talks with Indian officials, including Finance Minister Nirmala Sitharaman, on August 26, trying to persuade India to join the move. The discussion on the price cap is likely to continue next week during the visit of India's Commerce and Industry Minister Piyush Goyal's to the US.

India has not committed to the US’ proposal of capping Russian oil prices during the recent visit of US Deputy Secretary of Treasury Wally Adeyemo, three government officials in Delhi told Sputnik.

Last Friday, Adeyemo claimed that Delhi showed "great interest" in capping oil prices, a step Washington has been pushing for in a bid to curb Russia's export revenues in response to Moscow's special military operation in Ukraine.

"US sought our words on the proposal of oil capping. Why should we say anything about this? It is up to them to sort out [certain] issues before making any conclusion," one official told Sputnik, indicating that energy trade dominated the recent discussions between the two strategic partners.

The official added that talks also included the issue of a consensus among OPEC countries and some other geopolitical issues, such as the ongoing talks on the revival of the 2015 Iran deal.

"Will Gulf countries agree on price capping [given that] the step will negatively impact the business interests of OPEC? Will the US remove sanctions on Iranian oil exports? And top among them is [the question of] how Russia [will] react to the proposal," the official underlined.

Another government official approached by Sputnik said that India will continue to prioritize its national interests, which the Modi government has repeatedly underscored in response to western criticism of a massive jump in India's purchases of Russian oil.

India imports 85 percent of its oil, and "discounted" Russian oil has helped Delhi provide relief to 1.3 billion people from double-digit inflation. India also needs lower oil imports bill to control its ballooning trade deficit.

"It is their words, not ours. We can't guide anyone to speak in a particular manner," a third official, who was involved in the delegation-level talk with the US, told Sputnik, indicating discussions about the price cap were held, but it was Washington who was behind the initiative.

Arindam Bagchi, an Indian Foreign Ministry spokesperson, replied to Sputnik on Thursday, saying that the discussion with the US was held on issues such as "G20 priorities, climate finance, terror financing, energy security, energy trade, and issues related to the IMF."

On Friday, G7 finance ministers agreed to introduce price capping for international purchases of Russian oil.

The ministers also said that the G7 will develop "targeted mitigation mechanisms" to ensure that vulnerable countries will still have access to energy markets, including "from Russia."

Earlier, Kremlin spokesman Dmitry Peskov stated that the G7's plans for a price cap "will substantially destabilize" oil markets. He said that Russia will supply oil to those countries that operate according to market conditions.