WSJ: G7 countries to present plan to cap Russian oil prices on September 2
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The finance ministers of the G7 countries are planning to hold an online meeting on Friday, during which they are expected to agree on a plan to limit the price of Russian oil, writes The Wall Street Journal.
The plan discussed since the summer by the G7 countries involves a ban on financing and insurance of Russian oil supplies if they are carried out at a price higher than agreed by the G7 participants, the newspaper reminds. The size of the price ceiling for Russian oil remains the main issue discussed by ministers, the WSJ notes: officials want to keep Russia’s supplies, but significantly reduce its oil revenues.
“Our goal here is to create a permitting structure that will allow Russian oil to flow, but will reduce their revenues,” US Undersecretary of the Treasury Wally Adeyemo reiterated the goal of the initiative in her latest interview.
In addition, marginal prices may also be introduced in relation to Russian oil products, such as fuel oil, sources told the publication.
The talks of the G7 countries on limiting prices for Russian oil became known in July. How wrote then Bloomberg, 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. How pointed out at the end of July, Reuters, G7 plans to launch a new mechanism by early December, when the EU embargo on Russian oil supplies by sea comes into force.
By opinion Russian President Vladimir Putin, as a result of such restrictions, oil prices will rise sharply, and the West “steps on the same rake” as with the supply of Russian gas. Russian Deputy Prime Minister Alexander Novak also noted that the decision to limit prices for Russian oil would cause an imbalance in the market and an increase in quotations. Analysts at the American bank JPMorgan Chase & Co reported that oil could rise in price to $380 per barrel if US and European sanctions force Russia to strike back at its production.
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