G7 nations set to agree on Russian oil price cap
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G7 nations are set to meet virtually on Friday and are expected to agree on a Russian oil price cap, however, Russia had previously noted that it will not comply.
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G7 nations meeting in Germany on June 28, 2022 (Reuters)
The finance ministers of the Group of Seven nations are expected to attain an agreement on Friday that will put a cap on the price for Russian oil they’re willing to pay, Reuters has reported, citing anonymous sources. The officials are expected to reveal the general outline of a plan following an online meeting.
According to a Reuters report, an anonymous G7 official said that “a deal is likely.” The source, nevertheless, noted that it was uncertain how many details will be communicated.
On Thursday, British Chancellor of the Exchequer Nadhim Zahawi voiced hope that G7 finance ministers will “have a statement that will mean that we can move forward at pace to deliver this,” while White House spokesperson Karine Jean-Pierre declined to comment not to “get ahead of that meeting.”
Russia's oil export volumes have decreased since the commencement of the Ukraine war, although income increased by $700 million in June compared to May, according to the International Energy Agency in August, due to higher global oil prices.
The price ceiling, which Western leaders agreed on in principle in June, would limit the number of money refiners and merchants could pay for Russian oil. The measure is intended to reduce the Kremlin's earnings while keeping Russian oil on the market in order to avert price upsurge.
Moscow has previously stated that it will not comply, instead exporting its crude to nations that are not subject to the quota.
Several unidentified G7 officials told Reuters that they doubted the ban would be successful if just the group's members - the United States, United Kingdom, Canada, France, Germany, Italy, and Japan - enforced it. They noted that in order for the measure to have a tangible impact on Russia's oil profits, the G7 would need the support of large oil consumers like China and India.
According to Reuters, such a situation is improbable. Furthermore, while about 95% of the world's tanker fleet now relies on London-brokered shipping insurance, the paper noted, citing unidentified analysts, that alternatives may be found.
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