Wally Adeyemo, the deputy secretary of the U.S. Treasury, expressed optimism on Tuesday, September 6, that China and India would join the group of nations attempting to impose a price restriction on Russian oil or merely use the cap to purchase Russian oil at a lower price.
The G7 nations have decided on an oil price ceiling plan to prevent the Kremlin from making large profits from the energy sector. The idea is to entice Russian oil consumers to take part.
Western nations have made it a priority to attempt and reduce Russia's income from its energy exports ever since the conflict in Ukraine started.
"Our hope is that countries like China and India will join the price cap coalition, or take advantage of the price cap coalition, to lower the amount of money that Russia makes from oil exports," Adeyemo said at a financial industry conference in New York.
Sanctions haven't exactly been effective in that area. Russian energy income has increased since oil export quantities have exceeded expectations and gas prices have increased. Moscow anticipates a significant 38% increase in the volume of energy exports this year, according to a Russian economy ministry memo.
That is a key factor in why the G7 countries-Canada, France, Germany, Italy, Japan, the UK, and the US-as well as the European Union-agreed to a Russian oil price cap late last week in an effort to reduce the Kremlin's income.
G7 nations have already imposed embargoes on their own purchases of Russian oil; in the case of the European Union, they are set to take effect in the upcoming months. As a result, this strategy focuses on the crucial logistics services they manage, such as shipping and insurance, which other nations require to purchase Russian oil.
The EU embargo and the oil cap proposals will both go into effect at the same time. For crude and refined products, there will be two price caps. The crude cap will go into effect on December 5 and be followed by refined goods on Feb. 5, 2023.
According to the G7, the goal is to forbid insurance and shipping firms from transporting Russian petroleum products and seaborne crude unless they have been bought at or below a vague pricing barrier. Around 90% of the market for international shipping insurance is dominated by the G7 nations. If western insurers refused to cover its cargo, Russia would struggle to obtain the vast number of tankers needed to meet its needs for oil export.