Here is this morning’s news :
RUSSIAN OIL GREASES INDIA’S WHEELS
Graphic: (Mimansa Verma)
India is now among the biggest buyers of Russian oil, and US Treasury secretary Janet Yellen says that’s no issue, so long as Delhi doesn’t violate the bounds of the G7’s price cap, set to be finalized Dec. 5.
Last May, the US proposed a price cap on Russian crude oil that would waive sanctions if countries buy the stuff below a set price. The proposal would also deny the use of Western insurance, finance, and maritime services for tanker cargoes priced above a set limit.
Till now, Russia has not signaled any intent to sell its crude oil under the impending price cap, and it doesn’t have enough ships to transport its own oil. The big problem it faces: about 95% of the global tanker fleet is estimated to be covered by insurers in the G7.
Post-cap, Moscow may well turn to non-western shipping companies in the Arabian Gulf, China, and India to create alternative supply chains, giving its major oil buyers solid leverage to bargain.
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And here’s how I see it all : It takes a long long time and huge investment to build additional capacity in sea-going tankers. And the global insurance and re-insurance markets are all, as is well known, an unacknowledged mega-cartel .
India now faces a likely looming oil supply-chain disruption. What options does INDIA have but to comply with the price-cap regime soon to be imposed upon Russian oil exports ?
How long can Russia go on continuing to sell oil to India oil at the price capped by the G7 if that means badly losing out to the competition from OPEC who are not under G7 sanctions?
The global oil market already is a cartel … OPEC+ is an international cartel. The US move to impose now a price-cap on Russia is an insidious bid to sow the seed of disunity within the cartel and “remould it nearer its own heart’s desire”. It is a clever bid to set the cat amongst the OPEC+ pigeons. America clearly seeks to re-cartelise the existing OPEC+ cartel. It’s part of a larger geo-strategy to dominate and control the global energy market and supply-chains.
At some point in the future the global oil market will have to cave in and begin unravelling as supply-demand equilibrium gets severely impacted …. It could then inflame further the already dangerous tinder-box geopolitical situation in which the world finds itself today. A real World War III could then well become inevitable ?!
Janet Yellen saying INDIA is free to buy as much Russian oil as it wants so long as it doesn’t violate the G7 price-cap set is thus brazen price discriminatory, price fixing strong-arm tactic. It is anti-free-trade mafiosi-like behaviour. It’s akin to saying “you’re free to do what you wish so long as it accords with my wish”.
India will now be under pressure to contract with Russia under conditions of severe duress and undue influence.
Sudarshan Madabushi