G7

The G7 prepares two price caps for Russian oil products

The coalition of the Group of Seven (G7) will try to set two maximum prices for Russian refined products in February, one for those that trade at a premium compared to crude oil and another for those that trade at a discount, according to an official from the G7.

The coalition, made up of Australia, Canada, Japan and the United States, as well as the 27-nation European Union, set a cap of $60 a barrel for Russian crude from December 5, in addition to the EU embargo on imports of Russian crude oil by sea.

Starting February 5, the coalition will also impose price caps on Russian products such as diesel, kerosene and fuel oil, to further reduce Moscow’s revenue from energy exports and its ability to finance the invasion of Ukraine.

However, capping the prices of Russian oil products is more complicated than putting a price cap on just crude oil, because there are so many oil products and their price often depends on where they are bought, rather than where they are produced, the minister said. responsible, who asked not to be named.

Referring to the example of diesel and kerosene, which tend to trade at a premium to crude oil, while fuel oil is often sold at a discount, he said that was why the G7 was considering two price caps.

Melissa Galbraith
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