Moscow has offered to help India to get hold of large oil tankers to get around the
G7-backed price cap on Russian crude, as it hunts for buyers to replace its European market according to international media reports.
Under the price-cap rules, the G7 and its allies won’t allow vessels carrying Russian barrels access to their insurance and shipping services unless they sell crude at or below a set level. That makes it harder for shippers to transport the crude around the globe.
At a meeting on December 16, Russia’s deputy prime minister, Alexander Novak, welcomed India’s decision not to go along with the price cap and put forward its offer of help to Pavan Kapoor, the Asian country’s ambassador to Moscow.
“In order not to depend on the ban on insurance services and tanker chartering in the European Union and Britain, the Deputy Prime Minister offered India cooperation on leasing and building large-capacity ships,” the Russian Foreign Ministry said in a statement.
India, now a major buyer of Russia’s oil after getting steep discounts, has resisted
the efforts of the US to join the European Union, the UK and itself in the price cap measure introduced last Monday.
The measure aims to limit the price of Russian crude shipments at 60- US dollars per-barrel maximum, in an effort to slash the country’s revenues from crude exports and so curtail its ability to fund its ongoing war with Ukraine.
“The introduction of a price cap on Russian oil is an anti-market measure. It disrupts supply chains and could significantly complicate the situation in global energy markets,” Novak said, according to the ministry statement.
“Such non-market mechanisms disrupt the international trading system as a whole and set a dangerous precedent in the energy market. As a result, the problem of energy poverty is being aggravated not only in the developing world, but also in the developed countries of
Europe,” he added.
In the summer, Russia became India’s second-largest oil supplier, according to the foreign ministry.
But a sticking point is a shortage of vessels able to transport large amounts of oil on voyages now taking several weeks to reach their destination, which has pushed up freight rates.
