Russian Oil Cap Analysed and Explained
Why Was There a Price Cap on Russian Oil?
THE ASIAN INDEPENDENT UK
Bal Ram Sampla
Geopolitics
In 2022, many Western countries (like the G7 and the European Union) created a rule called the “price cap” for oil that Russia sells. This means that countries can buy Russian oil only at a maximum fixed price. If someone wants to pay more, they cannot use Western ships or insurance to transport the oil.
There were two main reasons:
1. To stop Russia from making lots of money to use in the war in Ukraine.
2. To keep oil available on the market so prices don’t go too high in the world.
Why Did India Buy Russian Oil?
India continued to buy oil from Russia. Russian oil became cheaper because the price cap forced it to sell at a discount. This was good for India’s economy: India could buy cheap oil and keep energy costs low. This was good business opportunity.
Did Buying Russian Oil Help the World?
Simple answer, Yes, it did. When India and other countries (like China) bought Russian oil, there was enough oil in the world market. This x̌stopped prices from going much higher for everyone. If India had not bought Russian oil, there might have been less oil for sale, and oil prices could have gone up a lot more.
What Did Jaishankar Say to the West?
When criticized for buying oil from Russia, India’s Foreign Minister Jaishankar said, “If you have a problem buying oil from India, don’t buy it.” This means India wanted to defend its own right to buy oil wherever it wants, to help its people and economy.
References
1.https://www.vox.com/world/2022/12/6/23490654/price-cap-60-russian-oil-europea n-union-ban-group-of-seven-united-states?utm
2.https://youtu.be/TmcyNHetmvk?si=QEHTiIkVlOUDVwBZ
3.https://zaiwalla.co.uk/news/article/russian-oil-price-cap-explained?utm
