Reasons behind Delhi agreeing to an oil price ceiling

This is very likely and logical. So let me explain a little bit (very briefly) about India and oil. 

India is forced and quite logically acts in the format of absolute cynical pragmatism. After all, ensuring the development and stability of a country of this scale is a unique challenge. Therefore, if the country is dependent on energy resources (the 4th-5th largest economy in the world with a population of 1.4 billion people and a lot of internal challenges and problems), it will buy them wherever they are the cheapest. Because it will increase the efficiency of its economy as a whole. Russia is very vulnerable right now. That is why India buys oil there. 

“If the country is dependent on energy resources (the 4th-5th largest economy in the world with a population of 1.4 billion people and a lot of internal challenges and problems), it will buy them wherever they are the cheapest. Because it will increase the efficiency of its economy as a whole. Russia is very vulnerable right now. That is why India buys oil there”

In a situation where the seller needs to sell more than the buyer needs to buy (because India can buy elsewhere, the Middle East and Africa are much closer to them), it is the buyer who dictates the terms. But Russians are not very smart, as we have already seen. After they managed to buy out or charter tankers in dubious or hybrid jurisdictions, Russia began to gradually try to abandon the discounts it had set last year. And they were very favorable to India. 

Therefore, if Russia thinks it can start selling at a higher price, India is taking a logical step - it is giving a pass to its key strategic partner in the region. And that is the US.

“If Russia thinks it can start selling at a higher price, India is taking a logical step - it is giving a pass to its key strategic partner in the region. And that is the US”

The US and India cooperate on economic and security issues in 2 cautious but quite effective formats: the I2U2 group (India, Israel, the US, and the UAE) and the Quadrilateral Security Dialogue (Australia, India, Japan, and the US). The main adversaries and risks in the region are the same. These are China, which has territorial disputes with India and an understandable rivalry in the region. And Iran, which is not behaving very adequately and is no less a threat to Indian security than Pakistan, which has too many internal problems.

And so - if Russia is not ready to balance and play by India's rules - it will be forced to sell their oil on India's terms. No, of course, India will not openly support Ukraine. At least not yet. But it will squeeze all possible dividends out of the situation. Because it has to. Because it can.

So this is not the last stab into Russia’s back.

Source

About the author. Yuriy Bohdanov, publicist, specialist in strategic communications in business, public administration and politics

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