The initial price range for Russian oil will be set “based on the range of technical inputs”.
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The Group of Seven richest nations agreed on Friday to a plan to implement a price cap mechanism on Russian oil exports, seeking to limit the Kremlin’s ability to fund its war in Ukraine and better protect consumers amid rising energy prices.
Finance Ministers representing the G-7 countries said In a joint statement, they recognized that the EU needed consensus among the 27-nation bloc.
“We aim to implement with a timeline of relevant measures within the EU’s sixth set of sanctions,” they said.
The initial price range will be set “based on the range of technical inputs”.
The G-7 reports that the effectiveness and impact of the price ceiling will be closely monitored and revised if necessary. G-7 consists of USA, Canada, France, Germany, Italy, UK and Japan.
Ahead of the announcement, Russia warned it would stop selling oil to countries that impose price caps on Russian energy exports and said capping Russian crude would lead to significant destabilization of the global oil market.
The G-7 first agreed to explore the possibility of imposing a ban on Russian oil shipments above a certain price in June.
There have been energy analysts Very doubtful About the integrity of the proposal, however, he warned that the policy could backfire if key consumers like China and India are not on board.
Oil prices rose on the news. International standard Brent Crude futures were trading up 2.7% at $94.89 a barrel in London on Friday afternoon. American West Texas Intermediate Futures rose 2.8% to trade at $89.10.
The G-7 price cap on Russian oil comes as Western economies seek to reduce Russia’s belligerence.
Data from International Energy Agency showed Russian oil exports fell by 250,000 barrels per day month-on-month in June to 7.4 million barrels per day, the lowest level since August last year.
However, the Kremlin’s export revenue rose by $700 million monthly. Higher oil prices helped Russia’s oil export revenue reach $20.4 billion, representing a 40% increase over last year’s average.