Impact of G7 Price Cap on Russian Oil Not Very Clear: India’s FM

The price cap on Russian crude oil of $60 per barrel, agreed upon by G7 nations, the EU and Australia, came into effect on December 5. New Delhi has indicated that it would continue to purchase oil from Russia, which has become one of its largest suppliers.

India will continue to follow a “sensible policy” that prioritizes the interests of the Indian people, the country's foreign minister Subrahmanyam Jaishankar reaffirmed on Wednesday.

Speaking in parliament, the minister underscored that the affordability and availability of crude oil matters most to the Indian government.

“The impact of this (price cap on Russian oil) is not very clear to us. Our concern is really what it would do to the stability and affordability of the energy market. That is our concern,” Jaishankar said while responding to a question about India’s approach to the price cap.

The government has been ensuring that the Indian public does "not pay the cost of some other country's action or some other region's action," the minister added.

The cap is set to come under review every two months to remain at 5 percent below the International Energy Agency (IEA) benchmark.

The price cap was implemented to curb Russia's oil revenue, which the West believes is funding Moscow’s special military operation in Ukraine. Analysts, however, believe the price cap would primarily distort the oil market, threatening the energy security of the global south.

Meanwhile, Russia has criticized the price cap as an attempt to manipulate “the basic principles of free markets,” clarifying that it will "only sell oil and oil products to those countries which will work with us according to market conditions."

Defending the massive jump in oil imports from Russia, India's top diplomat maintained oil companies are purchasing oil from countries offering the “best deal” to them.

“If tomorrow the market gives us more competitive options. Again, please do understand. It's not just that we buy oil from one country. We buy oil from multiple sources, but it is a sensible policy to go where we get the best deal in the interest of the Indian people and that is exactly what we are trying to do," the Indian minister emphasized.

In October and November, Russia replaced Iraq as India’s top oil supplier. India, the world's third-largest oil consumer, bought 21 percent of its total imports from Russia last month.