US Urges China and India to Voluntarily Join Russia Oil Price Cap Initiative

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The U.S. government has stated that China and India should voluntarily participate in the price cap on Russian crude oil and plans to encourage their participation going forward. China and India have so far refrained from joining the sanctions against Russia led by the U.S. and the European Union (EU), and have been criticized as loopholes in the sanctions by significantly increasing their imports of Russian crude oil.

On the 6th (local time), Wally Adeyemo, U.S. Treasury Secretary, attending a financial conference held in New York, announced that China and India are considering voluntarily participating in the price cap on Russian oil. Secretary Adeyemo emphasized, "For the price cap on Russian crude oil to be effective, countries like China and India need to join this coalition or utilize it," adding, "We will strengthen cooperation with financial service providers to design as simple an implementation system as possible."

Earlier, on the 2nd, finance ministers of the Group of Seven (G7) agreed to urgently implement a price cap on Russian crude oil and petroleum products. Accordingly, it is reported that the price cap will be first implemented in line with the full import ban on Russian crude oil under the EU's 6th package of sanctions against Russia, effective December 5.

In reality, imports of Russian crude oil and natural gas by the U.S. and the EU have significantly decreased, but criticism is rising that the sanctions' effectiveness is weakening as China and India are increasing their import volumes. China and India, not participating in the sanctions against Russia, are actively importing Russian crude oil at prices lower than the international market rate.

While the U.S. and Western countries are expected to strongly demand China and India’s participation in the Russian crude oil price cap, it is anticipated that the two countries are unlikely to accept it.

Before this agreement, when the U.S. raised the possibility of setting a price cap on Russian crude oil during talks in July, China avoided giving a definite answer, stating, "We think this issue is very complicated." The Indian government also recently stated that it will "carefully evaluate" whether to support the Russian crude oil price cap agreed upon by the G7.

This content was produced with the assistance of AI translation services.