US Treasury Officials in India Advocate for Oil Price Cap to Curb Russian Profits and Ensure Global Energy Stability

Two senior US Treasury officials are currently in India to advocate for the maintenance of an oil price cap aimed at restricting profits to Russia while also ensuring stable global energy markets, according to an official announcement.

Anna Morris, the Acting Assistant Secretary for Terrorist Financing, and Eric Van Nostrand, the PDO Assistant Secretary for Economic Policy, are visiting New Delhi and Mumbai from April 2-5 to engage with both government and private sector representatives, as per a statement released by the Treasury on Wednesday.

“Their agenda includes discussions on key bilateral matters such as cooperation on anti-money laundering and countering the financing of terrorism, as well as addressing other illicit finance concerns. Additionally, they will emphasize the importance of sustaining the price cap, which aims to curtail profits flowing to Russia for funding its unlawful invasion while simultaneously fostering stability in global energy markets,” the statement outlined.

Following Russia’s invasion of Ukraine in February 2022, the G7 nations, along with the European Union and Australia, collectively enforced a price cap. This measure prohibits the use of Western maritime services, including insurance, flagging, and transportation, for tankers transporting Russian oil priced at or above USD 60 per barrel.

In 2023, Russia emerged as India’s leading oil supplier. Despite India’s significant economic and defense ties with Russia, it has refrained from openly criticizing Moscow over its conflict with Ukraine.

Also read: Vistara Urges Pilots to End Strike, Promises Compensation Following Integration with Air India Roster

Morris and Nostrand are scheduled to deliver remarks on the price cap and engage in a question-and-answer session hosted by the Ananta Aspen Centre in New Delhi on Thursday.

A statement highlighted by the Treasury noted, “As articulated by Morris and Nostrand in a blog post last month, the second phase of the price cap continues to effectively achieve its dual objectives: curbing Russia’s oil profits while bolstering stability in energy markets.”

“The observed decline in the price of Russian oil since the initiation of the second phase reflects not only global trends in reduced oil prices but also a notable widening in the discount Russia receives in comparison to other global oil suppliers,” the statement elaborated.

According to the statement, energy market participants, analysts, and even Russian President Vladimir Putin’s oil czar have linked the increasing discount on Russian oil to heightened enforcement actions undertaken by the Coalition, as evidenced in the second phase of the price cap. This serves as clear evidence that the second phase is yielding positive results.

“The price cap plays a vital role in ensuring a consistent supply of energy to global consumers and businesses, empowering key importers such as India to negotiate more favorable terms. Concurrently, the price cap, alongside crucial sanctions enforcement measures, serves to diminish Putin’s profits from oil sales,” the statement concluded.