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G7 seeks to cap Russian oil price

G7 seeks to cap Russian oil price

G7 leaders are seriously considering setting a price cap on Russian oil imports. The idea behind the cap is to tie oil transportation and insurance to a price ceiling. In other words, a shipper or an importer willing to receive these services must agree to the sale of Russian crude and refined products at a price below the set limit.

However, the agreement between the Group of Seven economic powers has not yet been reached. The subject is still under discussion.

Earlier, US Treasury Secretary Janet Yellen reported that US officials aim to keep Russian oil flowing into the global market but at forcedly reduced prices.

Later, Yellen highlighted that the draft agreement before US and European authorities seeks to boost Russian oil supplies to the global market even despite all the Western sanctions. According to the US Treasury Secretary, this initiative is being actively pursued by the United States and its allies, which are suffering high inflation following their decision to completely refuse or cut imports of Russian energy.

After Russia launched a special military operation in Ukraine, Western countries imposed sanctions against the country, which mainly targeted Russian energy. The sixth package of sanctions adopted by the EU involves a partial embargo on oil imports from Russia. True, this ban applies only to crude delivered to Europe by sea. Thus, oil coming through the Druzhba pipeline is not subject to the new restrictions.

According to Russian President Vladimir Putin, the West's long-term strategy is a policy of enhanced containment with a view to weakening Russia, while sanctions are having an outsized impact on the entire global economy.

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