G7 announces price cap on Russian oil in support of EU price cap deal

• 

The G7 and Australia announced on Friday that they have agreed to implement a price cap on Russian fuel shortly after the EU issued a similar announcement.

According to a statement issued by the alliance, they have agreed on two ceiling prices: the first is priced at $100 per barrel for more expensive fuel like diesel and the second at $45 on lower-quality commodities such as fuel oil.

The statement adds that the policy is intended "to prevent Russia from profiting from its war of aggression against Ukraine" and support stability in energy markets. 

Earlier today, EU member states agreed on price caps for Russian petroleum products ahead of an international embargo set to go into force over the weekend, Swedish officials said.

"EU ambassadors today approved the price caps on petroleum products ahead of final adoption by the European Council (representing EU member states)," Swedish officials tweeted in the name of their country's role holding the EU presidency.

The agreement aims to target Russia's key exports and is the latest part of international pressure to limit Russian President Vladimir Putin's reserve of funds for his war in Ukraine.

In December, the EU imposed an embargo on Russian crude oil coming in by sea and agreed with its G7 partners to impose a price cap on Russian oil at $60 per barrel.

Read more: EU price cap on Russian oil creating chaos in maritime transport

The second round of sanctions on diesel, petrol, and heating fuel, arriving on ships by the EU is due to come into effect on February 5th.

The EU and the G7 group have agreed at the same time to impose a price cap on Russian shipments of those products to global markets.  

The price caps set a ceiling for the cost of fuel that can be transported on EU ships.  

The price cap agreed upon was an "important agreement as part of the continued response by EU and partners to the Russian war of aggression against Ukraine," the Swedish EU presidency said without providing details on the price cap levels for various petroleum products. EU officials were poised to brief the media on that later on Friday.

The 27-nation EU had been considering proposals from the European Commission to set a $100-per-barrel limit on more costly products, such as diesel, and $45 on the less expensive ones, like fuel oil.  

Diplomats said Poland and the Baltic states pushed for the price to be lowered to further curb Russia's income.

However, setting the levels is sensitive as the West does not want to cut off Russian supplies to world markets entirely and allow global prices to soar.

Read more: EU prepares 10th sanctions package against Russia