The United States anticipates India will persist in importing Russian oil despite international pressure, citing the imperative to ensure consistent energy flow amidst the Ukraine conflict, stated US Treasury Assistant Secretary for Economic Policy Eric Van Nostrand.
Van Nostrand clarified during an event in New Delhi that the aim of sanctions is to diminish President Putin’s revenue, emphasizing that once Russian oil undergoes refinery processing, it becomes a distinct product and thus not susceptible to penalties.
Presently, the trading of Russian oil faces constraints due to a Group of Seven strategy enforcing a $60-per-barrel price limit on Russian crude since December 2022. Buyers exceeding this limit risk losing essential Western financial and insurance backing for shipments.
Russia, previously a minor player in India’s oil supply, has surged to become the country’s primary supplier following the Ukraine conflict and ensuing Western sanctions.
Despite Western pressures and the ongoing war’s toll, Russia’s oil and gas tax revenue nearly doubled in March compared to the previous year. According to US Acting Assistant Secretary for Terrorist Financing Anna Morris, Russia has adapted to sanctions through a substantial “shadow fleet” of tankers.
The price of Russian Urals crude dropped to a $17 to $18 discount per barrel compared to global prices in January and February this year, down from the earlier $12 to $13 discount.
Morris emphasized that Russia will likely respond to an effective price cap by investing further to evade sanctions, necessitating ongoing adaptation and innovation in the Western strategy.
