G7 sets deadlines and ceiling parameters for Russian oil prices

Reuters reports G7 countries are planning by 5 December 2022 To upload Limit on Russian oil prices. It is stated that the price should exceed the cost of production, but below the market.

“The aim is to comply with the deadlines already set by the European Union. At the same time, we want the ceiling price mechanism to come into play,” he said.

It is stated that the price range will change. take shape Based on the principle that Russia will have “incentive to continue pumping oil (oil)”.

July 23 United States President Joe Biden declarationHe said putting a “ceiling” on the cost of Russian oil would help make fuel much cheaper in the United States. According to him, the increase in US oil production and its release from the US strategic reserve has worked for the time being.

At the same time, he expressed confidence that American oil and gas companies are now making super profits and should use these funds to increase their production and processing capacity. According to Biden, “a global cap on Russian oil prices” should be the next step, and the side effect will be a drop in gas prices at American gas stations.

How else do they want to punish Russia?

On July 27, it became known that US Republican Senator Marco Rubio introduced a bill that would impose sanctions on any legal entity that insures or registers tankers transporting oil or liquefied natural gas (LNG) from Russia to China. According to the politician, China is supporting the special operation in Ukraine by buying Russian oil.

“Any organization that helps them (Russia. – socialbites.ca) in these efforts, including Chinese state-owned companies, must face serious consequences,” he said.

The bill was supported by Senators Rick Scott (Fla.) and Kevin Kramer (North Dakota). Bloomberg noted that the initiative goes against the policies of the US President Joe Biden administration and has little chance of being approved in the Senate.

The publication points out that cutting Russian crude oil supplies to China could cause Beijing to compete with other major countries for oil from the Middle East and Africa, resulting in higher prices in the market.

Moscow’s reaction

Kremlin spokesman Dmitry Peskov reacted to the American sanctions bill and said the Kremlin expects the initiative against Russia’s energy supply to China not to develop.

“Let’s hope this initiative stays at the initial stage,” Peskov said.

According to him, the bill was not initiated by the US government. As Peskov adds, the author of the idea was simply a politician.

In response, Chinese Foreign Ministry spokesman Zhao Lijian said that China opposes the imposition of US sanctions on companies and legal entities that will buy Russian oil and gas.

“We strongly oppose illegal unilateral sanctions and the exercise of cross-border jurisdiction. “China conducts normal trade and economic cooperation with Russia on the basis of mutual respect, equality and mutual benefit, it is not directed against third parties and is not affected by foreign interference,” he said.

Asia is shaking backwards

On April 21, the Japanese newspaper Nikkei, citing Refinitiv data, reported that Asian countries continue to buy large quantities of oil from Russia, despite the situation in Ukraine and anti-Russian sanctions. By that time, 380 tankers had left Russia, more than in the same period of 2021. Of these, 115 tankers went to Asian countries: 52 to China, 28 to South Korea, 25 to India, nine to Japan and one to Malaysia. The authors of the article noted that deliveries to India subsequently increased by eight times, and to China – by 33%.

Asian countries’ interest in Russian oil is associated with a 30% reduction in the cost of the Ural brand, according to Refinitiv data. At the same time, Western countries, including the United States and Great Britain, announced the cessation of Russian fuel purchases. All this “made Russian fuel attractive” for countries whose purchases were not afraid of public attention.

On June 20, it was known that China increased its purchases of Russian oil by a quarter in May compared to April. Monthly delivery volume set a record. Purchases increased 55 percent. Beijing bought about 8.42 million tons, which is equivalent to about 1.98 million barrels per day. In April, this figure was 1.59 million barrels per day.

Reuters reported that the Group of Seven (G7) countries are planning to set up a mechanism to limit Russian oil prices by December 5, citing a senior representative of the G7. The price is planned to exceed the cost of production, but below the market.



Source: Gazeta

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