China, India discussed price cap on Russian oil

The Group of Seven G 7 nations had positive discussions with China and India on Tuesday about plans to implement a price cap on Russian oil exports, according to a report on Wednesday. The news came on the heels of the G 7 agreement on imposing a price cap on Russian oil, which was apparently part of the West's expansion of sanctions against Russia. Details are sketchy regarding the so-called discussions. As of press time on Wednesday, there was no official confirmation from relevant parties regarding Reuters' report, which cited an unidentified source. The report suggested that China and India would be able to buy Russian crude at even lower prices, but that would represent a significant shift for China and India as both have refrained from joining the US-led sanctions against Russia and have continued normal economic and trade cooperation with Russia. China's Foreign Ministry has stated that unilateral sanctions are not conducive to solving issues, and that China and Russia always engage in normal economic and trade cooperation on the basis of mutual respect, equality and mutual benefit. India has continued energy trade with Russia despite pressure from Washington. Although it remains unclear what the discussions were about and what the outcome was, one thing is clear: the G 7 led by the US is primarily focused on Russia, as their previous moves fail to sway Moscow, and the interests of China and India, or any other country for that matter, is not their primary concern despite the so-called attractive pitch. The US and some of its allies imposed an embargo on Russian oil in an effort to maximize pressure on Russia over the past several months, while the EU agreed to ban most Russian oil imports by the end of the year. The sanction measure aimed at depriving Russia of oil revenues has proved counterproductive. Russian oil export revenues increased by $1.7 billion in May to around $20 billion, which is well above the 2021 average of around $15 billion, according to the data released by the IEA. The idea of creating a buyers' cartel was created with the intention of keeping Russian oil supplies on the market to avoid a further price hike to limit its oil revenues. While a cap on Russian oil prices may sound like a great idea for the West when it comes to curtailing Moscow's revenues from oil sales, implementing such a price cap could be a fantasy with little feasibility if G 7 can't get the world's major oil importers on the same page. The problem is that G 7 nations are no longer major buyers of Russian oil, and as an unrelated third party, the G 7 doesn't have the qualification nor market power to dictate energy trade between China, India and Russia. Western media reports have suggested that the West may impose a price cap through insurance. 95 percent of the world's tanker fleet is insured through the International Group of Protection Indemnity Clubs in London and some companies in other European countries. G 7 could tell crude buyers that if they want to continue using the insurance service for Russian oil shipment, they need to agree to a capped price. Russia has already prepared an alternative by offering insurance through the Russian National Reinsurance Company, according to media reports. The moves could cause more barriers to be created and create more chaos in the global energy trade. As for China, stable energy prices are of great importance to its domestic social and economic development, and China and Russia are important partners in energy trade cooperation, with continuous practical progress recorded over the years. China and Russia can discuss the issue through bilateral channels if there is a need for price adjustment in bilateral energy trade. G 7 does not have a qualification to tell them how to conduct trade.