New Delhi: Eric Van Nostrand, Assistant Secretary for Economic Policy at the US Department of Treasury, praised the decision to impose a price cap on Russian oil, stating that it compelled Russia to sell oil at discounted rates to nations like India following its invasion of Ukraine.
Speaking at a session organized by the Ananta Centre to discuss the second phase of the price cap on Russian oil, Nostrand emphasized the importance of the policy in limiting Putin's revenue and ensuring global oil supply. He highlighted its success in the first year, with Russian oil being traded at significant discounts globally.
Nostrand pointed out that the US and its coalition partners have restricted Russia's ability to sell oil outside the price cap's jurisdiction. Despite Russia's attempts to narrow the discount on its oil, the coalition has intensified enforcement efforts, compelling Russia to offer larger discounts to consumers like India.
He described the policy's adoption and successful implementation as a diplomatic achievement, reflecting the unity of the coalition against Putin's war. Nostrand also emphasized the crucial role of engagement with Indian partners in both the public and private sectors.
In response to Moscow's invasion of Ukraine in February 2022, the United States, along with other G7 countries and the European Union, announced a price cap of USD 60 a barrel on Russian oil. Since October 2022, the US Treasury has been imposing sanctions on tankers suspected of carrying oil above the price cap, further restricting Russia's oil trade.
The aim of the price cap is to diminish Russia's ability to finance the war in Ukraine while ensuring adequate global oil supply. As a result of Western sanctions, Russia's oil trade has shifted towards countries like India and China, leading some shippers to resort to using older tankers, known as the "shadow fleet," which reduces Russia's revenues.
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