WASHINGTON (Diya TV) — In the midst of escalating sanctions on tankers transporting Russian oil above Western price thresholds, the United States has stepped in to assist India in securing reduced prices for Russian oil, revealed President Joe Biden’s energy envoy on Tuesday.
The recent sanctions, imposed by Washington on Russia’s leading tanker group Sovcomflot, coincide with the two-year anniversary of Moscow’s invasion of Ukraine. Additionally, 14 crude oil tankers were designated as property linked to Sovcomflot, sparking concerns in India, the largest buyer of Russian seaborne crude, regarding potential disruptions in oil sales, as reported by Reuters last month.
Amid these developments, Amos Hochstein, Biden’s energy and global infrastructure adviser, emphasized that the objective isn’t to withdraw oil from the market but rather to facilitate negotiations for better pricing. “I’m trying to get the Indians to negotiate better prices by forcing the tankers into a different direction. I think the Indians understand what we’re trying to do,” stated Hochstein.
Western sanctions on Russia have significantly reshaped global oil markets, redirecting Russian oil shipments towards new markets like India and China, while diminishing its reliance on traditional European consumers. The sanctions include a $60 per barrel price cap on Russian oil cargoes utilizing Western-based maritime services, driving many tankers to switch flags to evade sanctions.
Although the flag-switching tactic aims to circumvent sanctions, tankers could still be susceptible if they transport oil above the price cap with their original flag. The overarching goal of the price cap is to curtail Russia’s revenues available for funding the conflict in Ukraine while ensuring the continuous flow of oil to global markets.
The move comes amidst reports that India has ceased payments for Russian premium crude oil for two months and reduced shipments of Sokol, another premium grade, partially due to payment difficulties. Restrictions imposed by the Reserve Bank of India on transferring rupees stored in Indian banks to Russia have further complicated trade transactions, impeding President Vladimir Putin’s efforts to de-dollarize bilateral trade with India.
