The United States is trying to help India negotiate lower prices for Russian oil as it deepens sanctions on tankers carrying the petroleum above Western price caps, President Joe Biden’s energy envoy said on Tuesday.
Washington imposed sanctions late last month on Russia’s leading tanker group Sovcomflot on the two-year anniversary of Moscow’s full scale invasion of Ukraine. It also designated 14 crude oil tankers as property in which Sovcomflot had an interest.
That led to concerns in India of a potential dent in Russian oil sales to India, the biggest buyer of Russian seaborne crude, and that the fresh sanctions could complicate efforts by Indian state refiners to secure annual supply deals, Reuters reported late last month.
“At the end of the day, my goal is not to take it off the market, I’m not looking to take these tankers, take the crude, the product, off the market,” Amos Hochstein, Biden’s energy and global infrastructure adviser, told Reuters on the sidelines of a conference.
“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,” Hochstein said.
Western sanctions on Russia, one of the world’s top energy producers, have shifted global oil markets, forcing the country to ship oil to new customers in India and China and away from traditional consumers in Europe.
The sanctions and the $60 per barrel price cap imposed on cargoes of Russian oil that use Western-based maritime services such as insurance, transportation and flagging, have pushed dozens of tankers carrying Russian oil to swap flags from Liberia and the Marshall Islands that have registries based in Virginia, to flags from other countries, including Gabon.
The tankers have swapped flags in an effort to avoid sanctions, but they could still be vulnerable to the measures if they carried oil above the price cap with the original flag.
The goal of the price cap has been to reduce Russia’s revenues it can spend on the war in Ukraine while keeping oil flowing to global markets.
(Reporting by Timothy Gardner; Editing by Alison Williams)