G-7 nations return to Russia’s oil price cap plan

The G-7 price cap on Russian oil comes as Western economic powers seek to deplete Russia’s war stock.

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The Group of Seven wealthy nations on Friday agreed to implement a price cap mechanism on Russian oil exports, seeking to limit the Kremlin’s ability to fund the war in Ukraine and provide good consumer protection. in the context of high energy prices.

Finance ministers representing the G-7 nations said in a joint statement they acknowledged that, for the European Union, consensus is needed among the 27-nation bloc.

“We aim to align implementation with the progress of the relevant measures in the sixth EU sanctions package,” they said.

Prior to the announcement, Russia warned it would stop selling oil to countries that impose price caps on Russian energy exports and said imposing limits on Russian crude would lead to significant instability. of the global oil market.

The G-7 agreed for the first time to explore the prospect of imposing a ban on shipping Russian oil above a certain price in June.

Energy analysts have very suspicious However, on the integrity of the proposal, it warns that the policy could backfire if key consumers like China and India don’t join.

The G-7 includes the US, Canada, France, Germany, Italy, the UK and Japan.

Oil prices are higher on news. International standard Brent Crude oil futures traded 1.7% higher at $93.89 per barrel on Friday afternoon in London, while West Texas Intermediate USA Futures contracts rose 1.8% to $88.19.

The G-7 price cap on Russian oil comes as Western economic powers seek to deplete Russia’s war stock.

Data from the International Energy Agency shows Russia’s oil exports in June fell by 250,000 bpd from the previous month to 7.4 million bpd, the lowest level since last August.

However, the Kremlin’s export revenue is still up $700 million from the previous month. The IEA said higher oil prices helped Russia’s oil export revenue reach $20.4 billion, reflecting a 40% increase from last year’s average.

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