Edition: International | Greek
MENU

Home » World

G7 aim to have price cap on Russian oil in place before 5 December

The Group of Seven richest economies aim to have a price-capping mechanism on Russian oil exports in place by 5 December, when European Union sanctions banning seaborne imports of Russian crude come into force

By: EBR - Posted: Thursday, July 28, 2022

The G7 – the United States, Canada, Japan, Germany, France, Italy and Britain – said last month they would consider setting a price cap on Russian crude to curb the oil revenue that Moscow uses to finance its invasion of Ukraine.
The G7 – the United States, Canada, Japan, Germany, France, Italy and Britain – said last month they would consider setting a price cap on Russian crude to curb the oil revenue that Moscow uses to finance its invasion of Ukraine.

The Group of Seven richest economies aim to have a price-capping mechanism on Russian oil exports in place by 5 December, when European Union sanctions banning seaborne imports of Russian crude come into force, a senior G7 official said on Wednesday (27 July).

“The goal here is to align with the timing that the EU has already put in place. We want to make sure that the price cap mechanism goes into effect at the same time,” said the official, who asked not to be named.

The G7 – the United States, Canada, Japan, Germany, France, Italy and Britain – said last month they would consider setting a price cap on Russian crude to curb the oil revenue that Moscow uses to finance its invasion of Ukraine.

Since then there have been efforts to bring on board China and India, which are already buying Russian oil at a discount to the market price.

“We’ve already heard from a number of Asian countries that are interested in either joining the coalition or better understanding the price point at which the price will be set in order to strengthen their hand in their negotiations with the Russians over future contracts,” the G7 official said.

The price set by the G7 would be made public for that reason, he said.

China and India are interested in the idea of minimising their oil import costs because they are concerned about the budget impact through often-subsidised retail prices and inflation, the official said.

The G7 want the price on Russian crude to be set by members of the buyers’ cartel at a level above Russian production costs, so as to provide an incentive for the Kremlin to keep pumping, but much below the current high market prices.

This way, Russia would face a tough choice between agreeing to lower, but continued revenue and almost no revenue once the EU crude oil embargo enters into force in December.

The official said Russia will have a hard time selling its crude elsewhere because the EU sanctions envisage a ban on all financial services connected to trade in its oil, including insurance, re-insurance and financing of cargos and ships.

*first published in: www.euractiv.com

READ ALSO

EU Actually

US Midterm elections: only three months to go

N. Peter KramerBy: N. Peter Kramer

Until recently, Joe Biden struggled with the image of the weak leader who had to endure the doom and gloom of the world without coming to grips with it

View 04/2021 2021 Digital edition

Magazine

Current Issue

04/2021 2021

View past issues
Subscribe
Advertise
Digital edition

Europe

Digital Economy and Society Index 2022: overall progress but digital skills, SMEs and 5G networks lag behind

Digital Economy and Society Index 2022: overall progress but digital skills, SMEs and 5G networks lag behind

European Commission published the results of the 2022 Digital Economy and Society Index (DESI), which tracks the progress made in EU Member States in digital

Business

The post-pandemic workplace: experts explain how people and businesses can thrive

The post-pandemic workplace: experts explain how people and businesses can thrive

In this third year of the COVID-19 pandemic, companies large and small are slowly returning to business as usual

MARKET INDICES

Powered by Investing.com
All contents © Copyright EMG Strategic Consulting Ltd. 1997-2022. All Rights Reserved   |   Home Page  |   Disclaimer  |   Website by Theratron