© KremlinFILE PHOTO: Indian President Narendra Modi (L) meets with his Chinese and Russian counterparts at a meeting of BRICS leaders, September 4, 2016.
US Deputy Treasury Secretary Wally Adeyemo said he hopes China and India will join the G7's price cap on Russian oil. "Our hope is that countries like China and India will join the price cap coalition, or take advantage of the price cap coalition, to lower the amount of money" that Russia makes from oil exports," the official said on Tuesday.
Last week, the G7 announced it would set a maximum price for which Russia could sell its oil. In order for the West's plan to work, Moscow and other countries must comply. The Kremlin reacted sharply to the announcement by indefinitely closing the Nord Stream 1 pipeline, a move which sent European gas prices skyrocketing.
Comment: Maintenance of Nord Stream I has been hampered by the West's sanctions; if Russia wanted to totally cut the West off, it wouldn't be offering to sell them LNG instead: Russia is now producing LNG near the shuttered NS1 pipeline, in direct competition with US gas exports
The price cap is the West's latest move in a months-long economic war with Russia. In response to Moscow's invasion of Ukraine, President Joe Biden said he would attempt to destroy the isolated economy. So far, the sanctions regime has largely backfired as Europeans suffer with gas prices at 10 times the average and the Russian economy has fared far better than expected.
Comment: Top officials have also admitted companies will be forced to reduce or completely halt production, and that citizens could be threatened with jail if they heat their house above 19C.The following infographic from the UK's The Sun newspaper shows the impact the sanctions have had thus far:
Part of the Kremlin's economic success has been finding a market for its oil in China and India. The Centre for Research on Energy and Clean Air reports that Russia exported about $158 billion in oil from February to August. While most of that was exported to Europe, the EU decreased its imports over that period.
India's oil minister had preempted Washington urgings by kicking off the week bluntly staying, "We will buy oil from Russia, we will buy from wherever... I have a moral duty to my consumer."
To make up for the declining European market, Moscow has exported more oil to Beijing and New Delhi, and has benefited from increasing energy prices. India has increased its oil exports to Europe, suggesting it is acting as a backdoor to avoid sanctions.
Comment: And not just India, China is making a tidy profit from its middleman status: China selling gas to the West amidst its own economic slowdown
Analysts believe India and China are unlikely to implement the Western price caps. New Delhi and Beijing have been able to buy Russian oil at a discount since the start of the war, and the two nations will not want to risk their good deal with Moscow.
The Kremlin says any company or state that institutes the G7's price restrictions will be cut off from Russian energy exports.
Additionally, growing ties between Washington and Taipei have given Beijing and Moscow an incentive to deepen cooperation. Highlighted by House Speaker Nancy Pelosi's visit to Taiwan in August, China believes America is moving closer to supporting Taiwanese independence.
Beijing and Moscow are conducting joint war games along with signing oil contracts priced in yuan and rubles, signaling to the West they have abandoned their long-standing hostility.
I am only not sure how they want to defeat Russia, and in extension China. But judged by Least Trust's displayed character and latest statements, I have an idea...