US trying to help India get lower prices for Russian oil, says advisor to Joe Biden

World Wednesday 13/March/2024 04:19 AM
US trying to help India get lower prices for Russian oil, says advisor to Joe Biden

Washington DC: As the United States is deepening sanctions on tankers carrying petroleum above Western price caps, it is also trying to help India negotiate lower prices for Russian oil, Reuters reported citing the Biden administration's energy envoy on Tuesday.

Last month, on the second anniversary of the Russia-Ukraine conflict, the US imposed sanctions on Russia's leading tanker group Sovcomflot (FLOT.MM). It also designated 14 crude oil tankers as property in which Sovcomflot had an interest.

"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.

Notably, 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 USD 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.

However, even though the tankers have swapped flags in an effort to avoid sanctions, they could still be vulnerable to the measures if they carried oil above the price cap with the original flag, as reported by Reuters.

The goal behind the price cap is to reduce Russia's revenues that it can spend on the war in Ukraine while keeping oil flowing to global markets.