The G-7, the EU and Australia continue to turn the taps on Russian oil and fuel
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As the anniversary of Russia’s February invasion of Ukraine approaches, the G-7 countries and the European Union have expanded their embargo on Russian oil products to reduce Moscow’s resources for waging war against Ukraine.
The EU and the G-7 and Australia agreed to introduce a price ceiling for Russian oil products on the international market, including $100 for diesel fuel and $45 for fuel oil.
Meanwhile, a ban on the import of diesel fuel and other petroleum products produced in Russia came into force in Europe.
“The price ceilings we put in place will play a critical role in the global coalition’s efforts to reduce Russia’s ability to wage its illegal war,” US Treasury Secretary Janet Yellen said.
The USA, the EU, Great Britain and some others have previously completely or partially refused to buy coal and oil transported by sea from Russia, and in December they introduced a price ceiling for Russian oil on the international market – $60 per barrel.
Western governments hope that the combination of embargoes and price restrictions will mean that the world market will be supplied with oil products, but the prices of Russian exports will decrease, cutting into Moscow’s profits.
Income from energy exports is vital to the Russian state budget, and according to some Western estimates, the desired minimum oil price for Russia is $70 per barrel.
In general, the international sanctions imposed against Russia in 2022 did not have such a profound impact on the Russian economy as some Western leaders had hoped, because Russia in particular benefited from the global spike in energy prices caused by its invasion of Ukraine.
But Reuters reports that according to official data from the Ministry of Finance of Russia, for last January, the level of monthly revenues from the sale of Russian oil and gas fell to the lowest level since August 2020.
Russia is trying to compensate for the losses by redirecting its energy exports to countries such as China, India and others, which have increased their consumption of Russian oil, taking advantage, in particular, of price discounts.
In Moscow, Western sanctions are called illegal and harmful to the world economy.
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