The G7 supported the $100 price ceiling for Russian oil products
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The countries of the “Group of Seven” proposed to the European Union to set a price ceiling for Russian oil products at 110 dollars per barrel, but they will also agree to 100 dollars. This is reported by the Bloomberg agency with reference to the official representative of the Group of Seven.
As part of the sanctions introduced in response to Russia’s invasion of Ukraine, from February 5, 2023, two price ceilings for Russian oil products will come into effect in the world. One is for those oil products that are usually traded at a premium compared to crude oil (diesel fuel, gasoline), the other is for products that are usually traded at a discount (fuel oil).
The European Commission plans to set the first at 100 dollars per barrel, the second at 45 dollars. The “Group of Seven”, which includes the USA, Great Britain, Germany, Italy, Canada, France and Japan, would prefer a higher ceiling – at 110 dollars, fearing price jumps and disruptions in supplies to Europe, however “it can settle for a hundred dollars.” The discussion continues.
Bloomberg, with reference to specialized agencies, indicates that in recent months the prices of gasoline and diesel fuel from Russia have been above $100 per barrel, while futures for diesel fuel, excluding Russian supplies, now stand at around $125 per barrel.
The price ceiling means that the Group of Seven countries and the European Union will provide insurance and financial services related to Russian petroleum products only if they are purchased at or below the limit price.
- In December 2022, the price ceiling for Russian oil exported by sea at $60 per barrel came into effect. In response, Russian President Vladimir Putin banned the sale of Russian oil and petroleum products to countries that agreed to the price ceiling.
- Countries set price limits in order to reduce Russia’s income, which helps it continue the war in Ukraine, and at the same time prevent the cessation of supplies and a jump in world prices.
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