The United States and its allies are ramping up efforts to achieve the price cap proposal on Russian oil.
To counter this, Russia is said to be racing to secure long-term deals with Asian buyers to sell discounted oil.
According to a report, Russia has recently contacted several Asian buyers to discuss selling its oil at hefty discounts under long-term contracts, while the U.S. while the West are stepping up efforts to garner a broad coalition that would back a price cap on Russian oil.
A report by Bloomberg yesterday, quoting a Western official, said Russia has had initial talks with some Asian buyers about possible discounts of up to 30%.
This signals that Moscow may want to counter the U.S-led efforts to impose a price cap on Russian oil, the official told Bloomberg.
Another reason for Russia looking to offer discounts on long-term deals could be Moscow’s attempt to secure future markets in Asia for the oil that will no longer be allowed to be imported in the EU as of the end of this year.
The U.S. and the G7 group of the world’s most industrialized nations are leading the efforts to impose a price cap on Russian oil.
They are considering waiving the ban on insurance and all services enabling transportation of Russian oil if that oil is bought at or below a certain price, which has yet to be decided.
The Biden Administration and U.S. Department of the Treasury have been pushing for weeks to have as many oil buyers as possible agree to a price cap plan.U.S. Deputy Treasury Secretary Wally Adeyemo is traveling to India this week, where he will discuss a range of issues, including plans for a price cap on Russian oil.
Buyers in Asia, especially large importers China and India, would be crucial to such efforts if they agree to the price cap mechanism.
China and India have stepped up their purchases of heavily discounted Russian oil in recent months, attracted by the steep discounts at which Russian crude grades are offered on the spot marke.