The world’s most advanced economies have agreed to impose price ceilings on imports of Russian crude oil and petroleum products, in an attempt to limit the Kremlin’s revenue and resources to continue the war in Ukraine.
On Friday, finance ministers from the Group of Seven announced that they had agreed to impose a price cap on crude oil and oil products of Russian origin.
The initial price ceiling will be based on a set of technical criteria and the price level will be revised if necessary, the ministers’ statement said.
“We aim to bring the implementation in line with the timetable of the related measures under the sixth package of EU sanctions,” they added.
The EU imposed an embargo on Russian crude oil imported via tankers from December 5 and petroleum products from February 5, 2023.
The proposal to cap the import prices of Russian oil products came from the White House, but many analysts say it would be most effective if it had the support of third countries that buy Russian oil in large quantities, such as India. Otherwise, it will not significantly affect prices.
According to sources in the “Financial Times”, Washington is negotiating with China, India and a number of other countries that benefit from discounts on market prices offered by Moscow, after many European buyers, who are the biggest customer of Russian oil companies, refused to buy Russian oil because of the war in Ukraine.
In March, the US banned the import of oil from Russia, and in early June, the EU also approved restrictions on Russian crude oil and products.
The Kremlin responded by saying Russia would not sell oil to countries that would support a price cap, and warned that imposing a limit would significantly destabilize an already stressed market.
The G-7 group includes the USA, Great Britain, Japan, Canada, Germany, France and Italy.