US checks if foreign banks followed cap on Russia oil

A US government office is checking whether foreign banks operating in the US conformed to the G7 price cap of $60 a barrel for Russian oil, a person aware of the matter said.

- Rituraj Baruah & Utpal Bhaskar

The US treasury department's Office of Foreign Assets Control (OFAC) has sought details of Russian oil purchases by including those by Indian entities in the last few months, the person said on condition of anonymity. Indian banks operating in the US include State Bank of India (SBI), Bank of Baroda and Bank of India.

The G7 introduced the price cap on Russian seaborne crude oil in December to limit Russia's earnings from exports, which would, in turn, impact its military budget. The move bars the purchase as well as import of crude from Russia at rates exceeding the price cap. It is part of the strategy of the West to isolate Russia, as well as ensure a steady supply to stabilize global oil prices, which had surged following Russia's invasion of Ukraine in February 2022.

"The oil marketing companies (OMCs) have shared the information with SBI. OFAC  had asked for this information from banks having operations in the US," the person added.