The G7 countries proposed a new limit price for Russian diesel fuel — Bloomberg
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The Group of Seven (G7) has made it clear that it will be fine if the European Union sets a ceiling price for Russian diesel fuel in the range of $100 to $110 per barrel, as the United States and its allies try to avoid a serious market disruption. This is reported by Bloomberg.
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The EU’s ban on the import of refined petroleum products from Russia is due to come into effect on February 5, and the bloc is working with the Big Seven to set a price ceiling for sales to third countries. The European Commission proposed a limit of $100.
New price range
The new G7 diesel price range means that the G7 would prefer a higher price because of fears that setting too low a level could lead to price jumps or supply disruptions in Europe, but it is happy with the price of $100. The G7 representative noted the lack of free capacity on the diesel market, as well as a number of downtimes related to maintenance.
According to the official, negotiations are ongoing, but the parties are optimistic about reaching an agreement before the EU import ban comes into force.
Read also: Record discounts on Russian oil cut the Kremlin’s income by $3 billion — IEA
Russian diesel prices
It is difficult to know what the latest prices for Russian diesel fuel are, because the two main players in the market, S&P Global Commodity Insights and Argus Media Ltd., recently suspended some of their key estimates until the entry into force of the EU.
According to the official, Russian diesel fuel has recently been sold at prices ranging from $115 to $120 per barrel.
According to S&P Global, better known among traders as Platts, for several months until January 10, the price of fuel was generally above $100 per barrel.
According to ICE Futures Europe, on Friday the main futures for diesel fuel, excluding deliveries from Russia, were about $125 per barrel.
Read also: Russian oil is mixed in Singapore for further re-export — Bloomberg
The EU, which is discussing the price level in the coming days, must reach a unanimous decision to set the limit. The mechanism will operate by prohibiting EU companies from providing insurance or financial services for the transportation of Russian fuel unless it is sold beyond the price limit. There are two goals: limit Russia’s income without disrupting world energy markets.
The Big Seven and the EU have already set a price ceiling for Russian oil. They plan to introduce two restrictions for fuel. One of them applies to products that are more expensive than crude oil, for example, to diesel fuel. For cheaper products, such as fuel oil, the EU is studying limits of $45 per barrel.
Source: Ministry of Finance
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