Group of Seven (G7) finance ministers plan to impose a price ceiling on Russian crude oil and oil products, according to a joint statement on Friday, Reuters reports.
“Today, we confirm our common political intent to finalize and implement a comprehensive ban on services that enable the international maritime transport of crude oil from Russia and petroleum products – the provision of such services will only be permitted if the oil and petroleum products are purchased in specific prices, or lower, to be determined by the broad coalition of countries that will observe and implement the ceiling,” the Ministry of Finance said in their joint statement.
The initial cap will be based on a range of prices and that level will be reviewed when necessary, they added.
“We aim to plan the implementation with the timetable of the relevant measures in the context of the sixth package of sanctions of the E.U.,” state the Ministers of Finance.
THE US Treasury Secretary Janet Yellen he said he notes that the cap on Russian oil is “one of the most powerful tools we have to fight inflation.”
He points out at the same time that this measure will “deliver a painful blow to Russia’s economy, hindering its ability to wage war in Ukraine.”
The cap helps achieve our “dual goal of putting downward pressure on global energy prices while simultaneously preventing revenue [από το πετρέλαιο] to Putin to fund his barbaric war in Ukraine,” he says.
From the side of Japanese Finance Minister, Sunichi Suzuki welcomed the agreement at the G7 level, noting that the rapid implementation of the new plan should be ensured.
Speaking to reporters, Suzuki estimated that the cap is expected to help moderate the rally in energy prices and inflation.
“Implementation of a ceiling is important. It is also important to quickly implement what has been agreed,” he said shortly after the end of the virtual meeting of G7 ministers.
In their joint statement, the Ministry of Internal Affairs emphasizes at the same time that “we remain steadfast in our support and solidarity with Ukraine” and add that “we will continue to stand by Ukraine for as long as it takes.”
With a ceiling it has no oil, Moscow replies
The proposal to cap Russian oil has angered Moscow, which has threatened retaliation.
THE Kremlin spokesman Dmitry Peskovsaid today that Moscow will stop selling oil to countries that impose price caps on their energy resources, warning that doing so would lead to significant destabilization of the global oil market.
“Companies that impose a price ceiling will not be among the recipients of Russian oil,” Peskov noted, echoing comments made yesterday Thursday by Russian Deputy Prime Minister Alexander Novak.
It is recalled that the E.E. imposed a partial ban on Russian oil purchases earlier this year, which Brussels says will cut off 90% of Russian exports to the European bloc when it fully takes effect.
European Commission President Ursula von der Leyen also said today that the time has come for the EU to consider imposing a similar price ceiling on Russian natural gas markets.
Peskov noted that European citizens are paying the price for such moves. “Energy markets are at a fever pitch. This is particularly the case in Europe, where anti-Russian measures have led to a situation in which Europe is buying liquefied natural gas (LNG) from the US for much more money — unreasonable money. US companies are becoming richer and European taxpayers poorer,” Peskov noted.
Russia is considering how capping oil export prices might affect its economy, he continued. “One thing can be said for sure: such a move will lead to significant destabilization of oil markets,” he concluded.