G7 to 'urgently' implement Russian oil price cap | War in Ukraine

G7 to “urgently” implement Russian oil price cap | War in Ukraine

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

The G7 will “urgently” implement a Russian oil price cap and encourages a “broad coalition” of countries to participate in the move to deprive Moscow of some of its windfall from the energy sector, according to a statement released Friday.

The price cap will be set at a level based on a series of technical data and will be decided by the entire coalition before its implementation, the seven countries write in the statement, ensuring that future prices will be communicated publicly. in a clear and transparent way.

The decision, which must be implemented urgently according to the G7 declaration, was finalized during a virtual summit of finance ministers from the seven most industrialized countries (United States, Germany, France, United Kingdom, Canada, Japan).

Russia benefits economically from war-related uncertainties in energy markets, told reporters after meeting meeting with German Finance Minister Christian Lindner.

“Russia currently earns high profits from the export of raw materials such as oil and we want to oppose it resolutely. »

—Christian Lindner, Minister of Finance of Germany

The price cap is specifically designed to reduce Russia's revenue and its ability to finance its war of war. aggression, while limiting the impact of Russia's war on the world, especially low-income countries, the G7 says in its statement.

Concretely, Russia would sell its oil to these countries at a lower price than the one at which it sells it today, but which would remain higher than the production price, so that it has an economic interest in continuing to supply them. sell, and so that it does not cut its deliveries.

The challenge is to rally as many countries as possible, because the price cap will only work if all the major buyer countries take part, underline the experts, who point out in particular the role of China and India.

To this end, the G7 invites all the countries to advise on the design of the price cap and to implement this important measure, in order to build a broad coalition to maximize the effect of the measure.

The leaders of the G7 countries, at the instigation of Washington, launched work at the end of June aimed at developing the complex mechanisms of this ceiling which should be based on a prohibition for insurers and reinsurers to cover the maritime transport of Russian oil.

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