The Group of Seven (G7) is contemplating a move to tighten the price cap on Russian oil in a bid to curb Moscow’s revenue from oil exports, as the war in Ukraine continues. A draft statement reveals that the G7 nations may direct their finance ministers to revise the current price limit, which is set at $60 per barrel for Russian crude.
In December 2024, the Biden administration imposed tighter sanctions on Russian oil, with new measures affecting Russian producers, tankers, and insurers. As a result, key intermediaries that facilitate Russian oil shipments have ceased offering cargoes, the Chief Financial Officer of Bharat Petroleum, Vetsa Ramakrishna Gupta, revealed. The sanctions particularly target Surgutneftgas and Gazprom Neft, two major Russian oil firms responsible for handling 25% of the country’s oil exports. These two companies were responsible for shipping an average of 970,000 barrels per day in 2024.
Indian state refiners, including Bharat Petroleum, primarily purchase Russian oil from the spot market via traders. However, Gupta stated that the latest sanctions have disrupted the flow of oil. “We have not received any new offers for the March window. Traders are asking us to wait. We are waiting to get offers,” he told on Wednesday. He added that Indian refiners do not expect to receive the same volume of cargoes that were available in December and January.
In response to the sanctions, India announced it would comply by turning away tankers that are subject to sanctions. This decision may significantly impact Russian oil exports to India and China, the largest buyers of Russian crude. Last year, India briefly surpassed China as the largest importer of Russian oil. However, in November 2024, India’s Russian oil imports dropped by 55% compared to the previous year, marking the lowest level since June 2022. Analysts speculate that this decline may be a strategic move by India to diversify its oil supply and reduce reliance on a single source.