NEW DELHI: India is not obliged to follow the Russian oil price cap set by the Group of Seven leading economies(G7) and other Western nations as New Delhi is not a signatory to the agreement, an Indian oil ministry source said on Tuesday.

India has emerged as the top oil client for Russian seaborne oil as refiners, which in the past rarely bought Russian oil due to high transport costs, have snapped up Russian crude rejected by Western nations since the invasion of Ukraine in February 2022.

“Did we agree a price cap?…we have not signed up to the cap,” the source told reporters, when asked if Indian refiners are paying for Russian oil at above G7 price cap.

The G7, the European Union and Australia, agreed a $60 per barrel price cap late last year to bar Western services and shipping from trading Russian oil unless sold at an enforced low price to deprive Moscow of funds for its war in Ukraine.

Since the imposition of the price cap, Indian customers have paid for most of their Russian oil purchases in non-dollar currencies such as United Arab Emirates dirham and roubles.

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The source said there was no discussion to pay for Russian oil in yuan.

The refiners are paying Dubai-based traders in dirhams for some niche grades of Russian oil, mainly low sulphur oil, sold at above G7-imposed price cap, sources previously told Reuters.

Indian refiners mostly buy Russian oil on a delivered basis, with freight and insurance paid by the seller.

Sometimes the cost of oil at Russian ports rises above the $60 a barrel price cap as deals, mainly the discounts to the relevant benchmarks are finalised about one to two months ahead of loading, two sources at state refiners said.