G7 Agreement on Russian Oil Price Cap | War in Ukraine

G7 agreement on Russian oil price cap | War in Ukraine

The PCK oil refinery in Schwedt, Germany, majority owned by Russian energy company Rosneft and which processes oil from Russia.

The G7 will implement a Russian oil price cap as soon as possible to reduce the revenue Russia has to fund its war in Ukraine.

Finance Ministers of the Seven most industrialized countries (United States, Canada, Germany, France, United Kingdom, Italy and Japan) confirmed their commitment to this during a virtual summit on Friday.

Russia is currently making high profits from the export of raw materials like oil and we want to resolutely oppose this, German Finance Minister Christian Lindner told reporters after the meeting. .

The plan is to finalize and implement a comprehensive ban on services that allow maritime transport of crude oil and petroleum products of Russian origin to Russian origin. worldwide unless these products are purchased at a price determined by the coalition adhering to this project.

German Finance Minister Christian Lindner.

This ceiling, not yet known, will be set according to technical data on which the participating countries will agree.

The G7 also invites all countries to give their opinion on the design of the price cap and to implement it.

The challenge is to get as many countries on board as possible, because the price cap will only work if all major buying countries sign on. The participation of China and India, which continue to source Russian oil, is however far from certain.

Even before this announcement was made public, Russia had threatened to stop energy exports if the West imposed a cap on it.

Kremlin spokesman Dmitry Peskov warned in a press conference call on Friday that Russia would stop selling oil to countries that impose price caps. Companies imposing a maximum price will no longer receive Russian oil, he said.

“We will simply stop cooperating if the rules do not are not those of the market.

— Dimitri Peskov, Kremlin Spokesman

Moreover, such a decision will lead to a significant destabilization of the oil markets, he added.

United States Treasury Secretary Janet Yellen (Archives).

Americans, who had been pressing G7 leaders for months to impose the cap, reacted enthusiastically .

US Treasury Secretary Janet Yellen said in a statement that the landmark decision will deal a severe blow to Russian finances and hamper Russia's ability to wage its unprovoked war in Ukraine, while accelerating the deterioration of the crisis. Russian economy.

Washington, Ottawa and London have already banned imports of Russian oil, and Brussels has decided on an embargo which will be fully implemented by the end of 2022.

But Russia continues to sell its oil on the international market and the surge in barrel prices has enabled it to largely offset the fall in volumes.

In addition, the Norwegian energy company Equinor has announced that it has completed its withdrawal from Russia.

It sold its last remaining asset, the Kharyaga oil field, operated by the Russian company Zarubezhneft.

With information from Agence France-Presse, and Reuters

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