Sept 2 (Reuters) – Group of Seven finance ministers are expected to firm up plans on Friday to impose a price cap on Russian oil aimed at slashing revenues for Moscow’s war in Ukraine but keeping crude flowing to avoid price spikes, G7 officials said. The ministers from the club of wealthy industrial democracies are due to meet virtually and are seen as likely to issue a communique that lays out their implementation plans. “A deal is likely,” a European G7 official said, adding that it was unclear how much detail would be revealed, such as the per-barrel level of the price cap, above which complying countries would refuse insurance and finance to Russian crude and oil product cargoes. British Finance Minister Nadhim Zahawi said on Thursday in Washington that he was hopeful that G7 finance ministers will “have a statement that will mean that we can move forward at pace to deliver this.” “We want to get this oil price cap over the line,” he told a think tank event in Washington a day after discussing the cap with U.S. Treasury Secretary Janet Yellen. Despite Russia’s falling oil export volumes, its oil export revenue in June increased by $700 million from May due to prices pushed higher by its war in Ukraine, the International Energy Agency said last month. Western leaders agreed in June to explore a cap to limit how much refiners and traders can pay for Russian crude – a move Moscow says it will not abide by and can thwart by shipping oil to states not obeying the price ceiling. The G7 consists of Britain, Canada, France, Germany, Italy, Japan and the United States. Some officials in the bloc have said that the cap needs broader backing and have questioned whether it can be successful without the participation of major oil consumers China and India, which are unlikely to endorse the plan. But other G7 officials have said that China and India have expressed interest in buying Russian oil at an even lower price in line with the cap. The cap would rely heavily on denying London-brokered shipping insurance, which covers about 95% of the world’s tanker fleet, and finance to cargoes priced above the cap. But analysts say that alternatives can be found to circumvent the cap and market forces could render it ineffective Another G7 official said that the bloc has “a desire to show there’s momentum on this” ahead of the European Union’s planned imposition of a regional embargo on Russian crude on Dec. 5.
The U.S. Treasury has raised concerns that the EU embargo could set off a scramble for alternative supplies, spiking global crude prices to as much as $140 a barrel, and it has been promoting the price cap since May as a way to keep Russian crude flowing.
Russian oil prices have risen in anticipation of the EU embargo, with Urals crude trading at an $18-to-$25 per barrel discount to benchmark Brent crude, down from a $30-to-$40 discount earlier this year. NN: Another stupid idea by the very same people that created this mess to begin with…. Stupid is the order of the day.
Russia says it will stop selling oil to countries that set price caps
MOSCOW (Reuters) -The Kremlin said on Friday that Russia would stop selling oil to countries that impose price caps on Russia’s energy resources – caps that Moscow said would lead to significant destabilisation of the global oil market.
“Companies that impose a price cap will not be among the recipients of Russian oil,” Kremlin spokesman Dmitry Peskov told reporters in a conference call, endorsing comments made on Thursday by Deputy Prime Minister Alexander Novak.
“We simply will not cooperate with them on non-market principles,” Peskov said. Group of Seven (G7) finance ministers were due to meet virtually on Friday and were expected to firm up plans to impose a price cap on Russian oil purchases with the aim of reducing the revenues flowing to Moscow. The European Union earlier this year imposed a partial ban on Russian oil purchases, which Brussels says will halt 90% of Russia’s exports to the 27-member bloc when it fully comes into force. European Commission head Ursula von der Leyen said on Friday it was time for the EU to consider a similar price cap on Russian gas purchases. Peskov said it was European citizens who were paying the price for such moves, imposed in response to Moscow’s military campaign in Ukraine. “Energy markets are at fever pitch. This is mainly in Europe, where anti-Russian measures have led to a situation where Europe is buying liquefied natural gas (LNG) from the United States for a lot of money – unjustified money. U.S. companies are getting richer and European taxpayers are getting poorer,” Peskov said. Russia was studying how a price ceiling on its oil exports might affect its economy, Peskov said. “One thing can be said with confidence: such a move will lead to a significant destabilisation of the oil markets.” Before Russia sent tens of thousands of troops into Ukraine in February, Europe was the destination for almost half of Russia’s crude and petroleum product exports, according to the International Energy Agency. The bloc imported 2.2 million barrels per day (bpd) of crude, 1.2 million bpd of refined products and 0.5m bpd of diesel in 2021, with Germany, Poland and the Netherlands the largest customers. NN: talk about shooting yourself in your dick/tit…. some crazy shit. I expect nothing more. How can a idiot that created a problem be expected to solve that problem… Especially when they blame everyone but themselves….