Oil Price Cap by the G7: UPSC Important Topic: 7 December 2022
Oil Price Cap by the G7
∆ It is a plan by the G7 with the European Union and Australia to impose the price cap on Russian crude oil shipments, pegged at USD 60 to a barrel for now.
∆The price cap is essentially aimed at preventing firms in signatory nations from extending shipping, insurance, brokering and other services to Russian crude oil shipments that are sold at any value above the designated per-barrel price i.e., USD 60 per barrel.
∆Since it came into effect on 5th December 2022, the cap will only apply to shipments that are “loaded” onto vessels after the date and not apply to shipments in transit.
🧊India’s Stand:
∆Despite the United States-led sanctions on Russia post its invasion of Ukraine, India has decided to not just continue with, but also double its trade with Moscow in the “near foreseeable future”.
∆India’s consumption of Russian oil was just one-sixth of European consumption and should not be compared unfavourably, defending the government’s decision to increase its intake of Russian oil since the war in Ukraine.
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