The representatives of the G7 countries decide to set a price limit on Russian oil. This was made known when the ministers from the member countries met in Washington.
The Proposed Price Ceiling On Russian Oils
Following the attack on Ukraine, the G7 members had a plan to set a price ceiling on ships delivering Russian oil. This is coming in hand with the proposed embargoes planned by the European Union.
The price ceiling will be inflicted on Russian crude oil and refined oil on December 5 and February 5 respectively. The extent of the limit is not yet agreed upon.
UK chancellor, Nadhim Zahawi added that this is to lessen funds available for the Russians in the ongoing war. He also said the countries are in support of Ukraine and will do the best they could to help in their fight for freedom.
US Treasury Secretary, Yellen, added that this proposed price ceiling on Russian oils will go a long way to reduce inflation. According to her, it will also help avoid a future increase in price.
Russia To Stop Selling Oils To Countries With Price Caps
The Russians on Friday announced they will not trade oil with any nation that partakes in the planned price ceiling. They added that it will adversely affect the oil trade globally. This was announced by Dmitry Peskov, their representative.
Meanwhile, oils amount to about 44% of Russian total exports and also 17% of their total earnings via tax. However, there has been a rise in Russian oil shipped to non-European nations since the start of the conflict.
Following the Russian invasion in March, the UK promised to halt the importation of Russian oil by the end of 2022. The chaos in the Russian power market has affected Europe adversely.
Gazprom, which is backed by Russia, lowered its quota to Europe. Similarly, operation at the Nord Stream 1 has been stopped 3 times this week for repairs. Nord Stream 1 is the major supply path to Europe.
Gas fees have increased because of the fear of gas scarcity in the approaching winter. Consequently, energy companies like Shell and BP have recorded an increased profit.