FT: G7 countries will introduce a price ceiling for Russian oil from December 5

The G7 countries will agree at today’s meeting on the introduction of a price limit on Russian oil supplies, it will come into force on December 5, writes newspaper Financial Times.

Similar restrictions on Russian oil products will come into force on February 5 next year, the newspaper notes. According to the newspaper, the introduction of price restrictions was supported by the European Commission, but in order for these measures to be effective, it will be necessary to convince a significant part of the countries buying Russian oil, including India, to join them.

The talks of the G7 countries on limiting prices for Russian oil became known in July. As Bloomberg wrote then, Western countries are discussing a range from $40 to $60 per barrel, which will be higher than the cost of oil production, i.e. Russia will have an incentive to continue it. At the same time, the administration of US President Joe Biden considers the $40 limit too low and could lead to another jump in oil prices due to a reduction in Russian supplies. At the same time, Reuters reported that they plan to launch the new mechanism by December 5, when the EU embargo on Russian oil supplies by sea comes into force.

The day before, The Wall Street Journal informedthat the plan being developed provides for a ban on financing and insurance of the supply of Russian oil and oil products if they are carried out at a price higher than agreed by the G7 member countries. Russia will not supply oil and oil products to those countries that will impose a price limit on these products, declared yesterday Deputy Prime Minister of Russia Alexander Novak.

Since the beginning of the special military operation on the territory of Ukraine, India has begun to increase purchases of Russian energy resources. According to Reuters, in July Russia became the third largest supplier of coal to India, its imports increased by 20% compared to last month and reached 2.06 million tons.

This is due to the fact that in the face of Western sanctions and reduced energy supplies to the EU and the UK, Russia put up oil and coal for sale at a discount – at prices lower than those offered by other exporting countries. In particular, in May, Russia overtook Saudi Arabia in terms of oil supplies to India.

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