The United States hopes that India could see the benefits of a price cap on Russian oil, U.S. Treasury Secretary Janet Yellen told news outlet PTI in an exclusive interview ahead of her trip to India at the end of this week.
Secretary Yellen’s visit to India on November 11 could be crucial to the U.S. and G7 efforts to persuade the world’s third-largest crude oil importer to join the coalition of countries applying the price cap on Russian oil.
“Our objective is to hold down the price that Russia receives for its oil and keep that oil trading. The gainers from this will be particularly those countries that do buy cheap Russian oil, and our hope would be that India would take advantage of this price cap, though its firms are bargaining with Russia,” Secretary Yellen told PTI.
“If they (India) want to use Western financial services like insurance, the price cap would apply to their purchases. But even if they use other financial services, we believe the price cap will give them leverage to negotiate good discounts from world markets,” she added.
Earlier this year, the G7 group of the most industrialized nations agreed to finalize and implement a price cap on Russian oil, aiming to reduce Vladimir Putin’s oil revenues for his war chest. The G7, the EU, and the UK will ban as of December 5 maritime transportation services for Russian oil unless the products are purchased at or below a certain price cap.
Yet, many analysts and experts doubt that the price cap would serve its dual purpose of cutting revenues for Putin while keeping Russian oil flowing. One reason is that top importers China and India haven’t signed onto the price cap, and another is that Putin could simply make good on his promise to halt all energy supply—including crude, fuels, natural gas, and coal—to the countries that sign up to cap the price of Russian oil.