EU urges China and India to join in capping Russian oil prices

The European Union on Saturday (September 3rd) urged China and India to join a G7 initiative to cap Russian oil prices, saying it was unfair for countries to pay excess revenue to Moscow amid the Kremlin’s war in Ukraine.

The Group of Seven countries announced Friday, September 2nd, that they agreed on a plan to impose a specific price on Russian oil, with the aim of reducing the profits that Russia derives from selling oil and ensuring sanctions against the Kremlin for its war on Ukraine.

China and India increased their purchases of Russian oil in the wake of Moscow’s invasion of Ukraine, taking advantage of discounted prices.

When asked if the EU expects China and India to help with the proposed price cap, European Energy Commissioner Kadri Simpson said: “I think they should.”

Speaking to CNBC on the sidelines of the G20 energy meeting in Indonesia, Simpson said that China and India “are willing to buy Russian oil products while excusing themselves that this is important to security of supplies, but it is unfair to pay excess revenue to Russia.”

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

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The price cap is expected to be ready before early December when EU sanctions on seaborne imports of Russian crude begin, but market players are still waiting for more details on the exact level of the cap.

The EU’s head of energy policy did not say when final details would be provided, but added that technical work was underway.

Russia said it would not sell oil to countries that impose price limits. Moreover, in the wake of the G7 announcement, Russian energy giant Gazprom said it would not resume flows through the Nord Stream 1 pipeline due to technical problems.

The Nord Stream 1 pipeline, which links Russia and Germany across the Baltic Sea, was due to reopen on Saturday after three days of artwork.