Economy News

G7 eyes Russian oil price cap at $65-70 a barrel, says EU diplomat – Mintpaisa

The Group of Seven (G7) countries are considering a price cap for Russian oil transported by sea in the range of $65 to $70 a barrel, a European Union diplomat said on Wednesday.

Ambassadors from the 27 EU countries are discussing the G7 proposal with the aim of reaching a common position by the end of the day.

The G7, including the United States, as well as the whole of the European Union and Australia, are expected to implement price caps on maritime exports of Russian oil on December 5, as part of sanctions aimed at punish Moscow for its invasion. from Ukraine.

“The G7 is apparently looking at $65 to $70 a barrel bandwidth,” the diplomat said.

The idea of ​​the price cap is to prohibit shipping, insurance and reinsurance companies from handling shipments of Russian crude unless it is sold at a price no higher than the maximum price set by the G7 and his allies.

Since the world’s major shipping and insurance companies that deal in crude oil trading are based in G7 countries, such a price cap would make it very difficult for Moscow to sell its oil at a higher price. The vast majority of its oil is transported by tankers rather than pipelines.

At the same time, with production costs estimated at around $20 a barrel, the price cap would still make it profitable for Russia to sell the oil, while avoiding a supply shortage on the world market.

Future Brent crude oil prices for the first month initially fell to $86.54 from $87.30 on the news.

Source link

Leave a Reply

error: Content is protected !!