Britain is discussing with the G7 countries a revision of the price ceiling for Russian oil
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The UK is discussing with its G7 partners – Germany, Italy, Canada, France, Japan and the USA – the effectiveness of a price ceiling on Russian oil in the face of changes in world fuel prices. About this in an interview Reuters said the Kingdom’s Finance Minister Joanna Penn.
Ms. Penn told the agency that capping the cost of Russian oil has been successful in maintaining supplies on the world market. This measure also made it possible to reduce Russia’s income and at the same time increase the country’s costs for oil exports, the minister noted. “We have to monitor their effectiveness. We need to think about how the response will evolve and therefore how price caps can be changed,” added Joanna Penn.
The minister noted that the UK continues to adhere to the price ceiling of $60, but is discussing further pricing policy with its partners, including the United States, and is keeping it “in constant review.” Asked by the agency whether the UK was discussing a formal review of the price cap on Russian oil, Ms Penn said: “A formal review of the price cap is one aspect of such a policy.”
The price limit of $60 per barrel for shipment from Russian ports was introduced by the G7, the European Union and Australia, in response to the fact that the Russian Federation began hostilities in Ukraine. According to the EU, shipowners and insurers should not transport or insure tankers with Russian oil if it is sold at a price above the ceiling.
After the introduction of a price ceiling, international companies began to abandon tankers that carried Russian oil. However, it is estimated Bloomberg, approximately two-thirds of oil and petroleum products from Russia are transported by ships insured or owned by countries that have joined the price ceiling on Russian supplies. At the same time, transported oil is sold above the established ceiling.
According to the Ministry of Finance, the average price for Urals oil from August 15 to September 14, 2023 was $77.03 per barrel. The Urals discount to Brent was reduced due to an agreement between Russia and Saudi Arabia on a voluntary reduction in oil exports abroad by 500 thousand barrels per day. The voluntary reduction will continue into 2024.
Read more in the Kommersant article. “Barrels are counting in the fall”.
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