Russia has surpassed Iraq and Saudi Arabia as India’s largest supplier of oil, according to independent research companies, as Asia’s third-largest economy cashes in on steep price discounts caused by sanctions against Moscow.

India has historically bought most of its oil from Iraq and Saudi Arabia, but Russian imports have surged since president Vladimir Putin’s invasion of Ukraine.

Western energy sanctions against Russia have pushed it to cut prices for those buyers still willing to purchase its crude, squeezing out more expensive supply in countries such as India, oil trade data show.

US Treasury secretary Janet Yellen has signalled that the US was willing to see this trend continue, telling Indian media this week that Washington wanted India to benefit from a western price cap on Russian oil that would give it a bargaining chip to negotiate even deeper discounts.

G7 countries agreed in September to implement the price cap, which the US government hopes will be in place by December 5 when an EU embargo on the shipment of Russian crude comes into force.

Under the mechanism, European companies will be permitted to transport and insure shipments of Russian oil to third countries as long as it is sold below a fixed price — an effort to limit the impact of the sanctions on global oil flows but ensure Russia’s earns less from the trade.

“Our objective is to hold down the price that Russia receives for its oil and keep that oil trading,” Yellen told the Press Trust of India on Monday ahead of a visit to New Delhi this week. “Our hope would be that India would take advantage of this price cap.”

(With inputs from agencies)