US Claims Talks With India to Cap Russian Oil Price 'Encouraging', But Delhi Yet to Agree to Idea

A US Treasury official has told Reuters that the conversation with Indian officials about capping the price of Russian crude took place before Janet Yellen left for Asia on July 12 for a weeklong trip to Japan, Indonesia and South Korea. Yellen attended the G20 Finance Ministers’ and Central Bank Governors’ Meeting meeting in Bali last week.

US Treasury Secretary Janet Yellen has described her talks with her Indian counterpart to cap the price of Russian crude oil as “encouraging”, as per an interview given to Reuters after the conclusion of the G20 Finance Ministers’ and Central Bank Governors’ Meeting in Bali.

“We’ll see where they come out. The conversations I’ve had have generally been encouraging," Yellen told the news agency while en route to Seoul from Bali on Monday.

A US Treasury official conceded that New Delhi was yet to agree to the idea of capping the price of Russian oil. The official claimed that India, at the same time, hadn’t “expressed hostility to this idea.”

The American official added that no meeting had taken place between Yellen and her Indian counterpart at the G20 meeting.

New Delhi was represented by Finance Minister Nirmala Sitharaman and Reserve Bank of India (RBI) Governor Shaktikanta Das at the G20 meeting, according to an official statement.

A statement by the US Treasury has said that Yellen did, however, hold meetings with her counterparts from Australia, Singapore, Saudi Arabia, South Africa and Turkey on the sidelines of the G20 meeting.

During her meetings, Yellen sought “cooperation” from other governments in a US-led push to cap the price of Russian crude in order to “restrict” Moscow’s energy revenues, as per the statement.

A plan to cap prices of Russian crude oil in the global market was first formally discussed last month at the G7 Summit in Germany, where Indian Prime Minister Narendra Modi was also invited to participate.

According to several reports, the US, European Union (EU) and other Western allies are seeking to limit the price of Russian crude to between $40 and $60 per barrel by banning insurance and transportation services to ship Russian crude unless it is purchased at a capped price.

The West-led push to cap Russian oil prices comes as Russian energy revenues remain almost unaffected in spite of six rounds of coordinated sanctions against Moscow by the Western allies over its special military operation in Ukraine.

New Delhi, for its part, has consistently justified its decision to purchase enhanced volumes of Russian crude in the interest of its "energy security".

The Western efforts to phase out Russian oil from international energy markets has contributed to oil prices hitting their highest level since the Global Financial Crisis (GFC) in 2008.

Data from India’s Commerce Ministry this month has shown that New Delhi’s import of Russian crude has surged by 620 percent in April-May quarter as compared to the January-March period, marking an all-time high.

India’s coal imports from Moscow also surged by 266 percent in the April-May period as compared to the preceding three months.

As far as China is concerned, Russia replaced Saudi Arabia as Beijing’s top crude supplier last month.

Russia’s energy exports have not been included in the Western sanctions, largely due to the EU’s reliance on them.

Japan and the EU, both major importers of Russian oil, coal and natural gas, have agreed to phase energy imports from Moscow out of their energy mix by the end of this year.