US & allies discussing capping Russian oil at $40 to $60

By Al Mayadeen English
Source: Agencies
6 Jul 2022 20:02
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The G7 continues to seek ways to control the Russian oil trade.

US President Joe Biden, Britain's Prime Minister Boris Johnson, European Council President Charles Michel, Japan's former Prime Minister Yoshihide Suga and Italy's Prime Minister Mario Draghi during the G7 summit in Carbis Bay, Cornwall, Britain, June 11, 2021 (Reuters)

Bloomberg reported on Wednesday that the US and its partners are considering capping Russian oil at $40 to $60.

During the G7 meeting between June 28-30 in Germany, the member states issued a communique which said that the oil price cap scheme could be implemented through, for instance, allowing Russian seaborne crude oil and other petroleum derivatives to be shipped around the world but only if they are purchased at or below a threshold price.

During the summit, the G7 affirmed their plans to diminish European dependence on Russian energy, especially through implementing sanctions on Russian resources.

In the latest summit, the G7 encouraged oil-producing countries to ramp up oil production to ameliorate the turbulence that energy markets have been experiencing with the war in Ukraine, and to instigate less dependency on Russian energy.

G7 disappoints with fossil fuel 'loophole'

After three days of bargaining, the G7 decided to authorize public investment in new international fossil fuel projects under specific circumstances, as nations seek to break free from Russian oil, coal, and gas in the aftermath of the war in Ukraine.

Friederike Roder, vice president at the non-profit group Global Citizen, said German Chancellor and summit host Olaf Scholz "promised a crucial boost for international climate action and he didn't deliver."

An alliance of civil society organizations, notably Oil Change International, delivered a harsh judgment, criticizing the "loopholes" in the final communique on gas.

The agreement reiterates that the G7 countries would continue to freeze new public investments in foreign fossil fuel projects by the end of 2022.

However, because of the "exceptional circumstances" of the Ukraine war, publicly supported investment in the gas sector can be appropriate as a temporary response.