G7 pact with India, China on Russian oil price cap not feasible: expert

INDIA and China might have agreed to the proposal of the Group of Seven (G7) countries to set a price cap for Russian oil but according to experts, the agreement would not be feasible because of difficulties of compliance.

Financial analyst Mikhail Belyayev told Russian news agency TASS on Wednesday (29). “They would do that and that would tear up the agreement.”

He said New Delhi and Beijing would nod to the G7 proposals because they are interested in reasonable oil prices but they would still buy oil if they need more of the essential commodity at a different price.

“They would do that and that would tear up the agreement,” Belyayev said.

Russia will not face irreparable damage: expert

Belyayev said the agreement would be unpleasant for Russia as well but the damage would not be beyond repair. According to him, Moscow’s oil and gas sector is highly resilient and Russian companies earned a heavy revenue from the recent spike in prices of oil and gas.

“Of course, after this, there may not be any talk of super profits, but the profit will be normal; it’ll be standard for any business and the industry,” he told the Russian news agency. “We have resilience that’s sufficient enough to take that without serious concern and alarm,” he added.

The G7 vowed after its recent summit in Germany to explore a price cap for Russian oil by banning the commodity’s shipping by sea unless its price falls within a certain range which has been approved by international partners.

On Tuesday (28), Reuters reported that the talks between G7 and the two Asian powers about the plan were successful.