EU’s Energy Chief urges China and India to support a Price Cap on Russian oil

EU’s Energy Chief urges China and India to support a Price Cap on Russian oil

The EU’s energy chief on Saturday urges China and India to support the G-7 initiative to apply a price cap on Russian oil, by saying it was unfair for countries to pay excess income to Moscow in the midst of the Kremlin War in Ukraine.

The G-7 nations announced on Friday that they agree on a plan to impose a price set on Russian oil.

The policy is designed to reduce the benefits that Russia achieves by selling oil and acts as another punitive measure against the Kremlin for its assault on Ukraine.

The details of how the price cap will work are still being completed, but energy analysts have expressed concerns about this plan, particularly about whether main consumers like China and India will join.

China and India increased their Russian oil purchases after the invasion of Ukraine by Moscow, benefiting from reduced rates.

When asked whether the EU expects China and India to help with the proposed price cap, European Energy Commissioner Kadri Simson said: “they should do.”

Addressing CNBC on the sidelines of the G-20 energy meeting in Indonesia, Simson said that China and India “are ready to buy Russian petroleum products while apologizing that this is important for their supply security. But it is unfair to pay excessive income to Russia.”

“Thus, a cap also gives buyers who have not joined our sanctions a chance to receive oil at a fair price, a price where a war factor is not added,” said Simson.

The United States said last week that it had constructive talks with India on the issue, while China said in July that a price cap was a “very complicated problem”.

The head of the EU energy policy does not say when the final details will be presented but add that technical work is ongoing. “We are under a very large time pressure,” she said, adding that this usually means steps like happen “faster than later.”

Russia said it would not sell oil to countries that impose price caps.

“The main impact of the G-7 oil price cap will be to further shift economic competitiveness from Europe to India, Turkey, China, and other Asian states,” Chris Weafer, chief executive officer at Macro-Advisory, said in an email to clients.

“Russia will not sell oil to the so-called hostile Western nations, but will continue to sell to the Asian nations at a discount on the world price,” he added.

EU’s Energy Chief urges China and India to support a Price Cap on Russian oil