Business Standard: Russia offered India a discount on oil for abandoning price caps

Business Standard: Russia offered India a discount on oil for abandoning price caps


Russia has offered India to lower the price of oil supplies on the condition that New Delhi opposes the initiative of the G7 countries on marginal oil prices, the newspaper writes. Business Standard with reference to sources among officials and the Indian Foreign Ministry.

According to sources, it is expected that discounts on Russian oil will be greater than those offered by Iraq recently.

“It is about India not supporting the G7 proposal. A decision on this issue will be made later, as negotiations with all partners progress,” the Indian Foreign Ministry said.

In May, India traded $16 a barrel less for Russian crude compared to an average $110 import basket price, the newspaper writes. In June, the discount was cut to $14 per barrel, and as of August it was $6 off the average price of imported oil.

India's largest oil supplier, Iraq, has undermined Russia's position in that market since late June by supplying a range of crudes, delivering several grades of crude at an average price per barrel $9 below Russia's, the paper notes. As a result, Russia, with a share of 18.2%, fell to third place in the ranking of countries in terms of oil supplies to India. The first place is now occupied by Saudi Arabia with a share of 20.8%, the second is Iraq with 20.6%.

September 2 G7 finance ministers (USA, UK, Canada, Japan, Italy, France and Germany) declared about the intention to introduce a price ceiling for Russian oil. To do this, they want to create a "broad international coalition" that will set a price limit for Russian oil. According to US Deputy Treasury Secretary Wally Adeyemo, the introduction of such a measure will ensure the supply of Russian oil regardless of new sanctions, as well as avoid sharp jumps in gas prices.

According to the plan, a ban will be introduced on financing and insurance of Russian oil supplies if they are carried out at a price higher than the agreed one. According to the Financial Times, the restriction on oil supplies will come into effect on December 5, when the EU embargo on Russian oil supplies comes into force, and on oil products on February 5, 2023. In this way, European officials want to keep the supply of products from Russia, reducing this is its oil revenues.

In response to such a decision, the press secretary of the President of Russia Dmitry Peskov said that when a price limit for Russian gas, oil and oil products is set, these energy resources will be supplied in other directions - to countries that work on market conditions.



Source link