Report: India seeks supply surety before any talks on Russia cap

MOSCOW, Sep 6 (PRIME) -- India will consider backing the U.S.-proposed price cap on Russian crude only if supplies from countries such as Venezuela and Iran are assured, Indian business daily The Economic Times reported on Tuesday quoting sources.

Given its dependence on imported crude, India cannot accept a situation in which open market prices rise because of uncertain and restricted supplies, while a limit is imposed on cheaper sources, people aware of the matter told ET.

"How can discussion on cap happen when supply sources are restricted?" a government official said. "You can talk about a cap after Venezuela and Iran supplies are available in the market."

U.S. deputy treasury secretary Wally Adeyemo, who was in India late last month, said the Biden administration has invited India to join the Russia oil price cap coalition to reduce Moscow's earnings from crude.

G-7 finance ministers on Friday agreed to impose the limit, deciding to work out its details later. But Moscow hit back, saying it would stop supplies to countries that put this in place.

FEARS OF SHORTAGE

On Monday, Russia said the Nord Stream 1 pipelines supplying gas to Europe would stay shut indefinitely, sending prices soaring amid fears of shortages in the winter. High crude and gas prices take a heavy toll on India's economy, given the over 85% import dependence on crude.

Last month, external affairs minister S Jaishankar said India is trying to get the "best deal possible for its citizens," and that this was his "moral duty," when asked about India's purchases of Russian crude oil. India imported 738,024 barrels per day (bpd) of Russian crude oil in August, 18% lower than in July and 24.5% less than in June, according to Vortexa.

The U.S. and Iran have been in discussion on a nuclear deal that will open up crude sales from the latter, easing global supply pressures and giving the West leverage to restrict Russian oil. A deal is expected this month. The U.S. has imposed economic sanctions on Venezuela's economy and oil sector, which has restricted supply from that country.

US PROPOSAL

During his visit last month, Adeyemo said India has "shown great interest" in the price cap proposal since it aligns with the objective of keeping energy rates lower for domestic consumers. "If India is part of the coalition, it can have a say in deciding the price cap," he had said in New Delhi.

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