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1 Sep, 2022 11:00

G7 to discuss Russian oil price cap – Bloomberg

The US and its allies hope the measure will reduce Moscow's revenues
G7 to discuss Russian oil price cap – Bloomberg

Finance ministers from the Group of Seven (G7) developed Western economies are planning to discuss the introduction of a price cap on Russian oil exports on Friday, Bloomberg reported on Thursday, citing US officials.

The measure is aimed at reducing Russian revenues from crude exports and easing the pressures the global oil market is currently facing.

This is the most effective way, we believe, to hit hard at [Russian President Vladimir] Putin’s revenue and doing so will result in not only a drop in Putin’s oil revenue but also global energy prices as well… We’ll hear more on Friday how this is going to work, and it is not just us – it is also a partnership with our allies, the G7,” White House Press Secretary Karine Jean-Pierre was cited as saying.

According to earlier statements by the G7, which includes the US, UK, Canada, Japan, Germany, France, and Italy, it is looking at “options for a comprehensive ban on all services related to the shipping of Russian crude oil and petroleum products by sea around the world, unless the oil is purchased at or below the price to be agreed upon in consultation with international partners.

However, it is not clear what the price cap would be, when it may be implemented, or how it would work. Russia had previously threatened to stop domestic oil production if it becomes unprofitable. The move would likely exacerbate the global energy crisis.

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