What is the reason for India's reduction in Russian oil purchases, related to the US and G7?

On January 3, Indian Oil Minister Hardeep Singh Puri said that the country's reduction in Russian crude oil imports in recent weeks was due to the discount rate no longer being attractive.

India cited reasons for reducing oil imports from Russia. (Source: CNN)

Speaking at a press conference in the capital New Delhi, Petroleum Minister Hardeep Singh Puri affirmed: "There is no problem with payment, it is purely related to price."

India's priority is to ensure the cheapest possible prices for consumers, he added.

Tighter enforcement of sanctions by the Group of Seven (G7) industrialized nations and related payment issues have hampered India’s purchases of some crude cargoes from Moscow, tanker-tracking data monitored by Bloomberg showed on Jan. 2.

In late 2023, the US took a tougher stance on sanctions against Russia and sanctioned several vessels for violating the G7 price limit of $60 a barrel, above which goods cannot use Western insurance and financing.

Several of these sanctioned tankers were en route to New Delhi loaded with Russian Sokol oil and departing from Far Eastern ports.

Five Sokol tankers arrived in India last month, according to ship-tracking data compiled by Bloomberg . But all five are now leaving the country and heading to the Strait of Malacca.

This suggests that New Delhi did not trade with these ships after all.

As of late November 2023, India was still considering whether to allow a sanctioned Russian tanker to access and dock at one of its ports — a sign that US controls on Russian crude trade could limit India’s ability to import cheaper oil.

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