The finance ministers from the G7 have agreed on a plan to restrict the price of Russian oil, according to a Reuters summary of the joint statement. The plan envisions a broad international coalition and a ban on providing maritime transport services for Russian oil if its price exceeds a coalition-set ceiling.
The G7 reaffirmed their collective intent to implement a comprehensive global ban on maritime transport services for Russian crude and oil products. The statement noted that such services would be allowed only when oil is purchased at or below the ceiling price established by a broad coalition of willing states.
The initial ceiling will be based on technical data but may be adjusted in the future.
The security price will be published openly and transparently. The G7 also pledged to monitor the effectiveness and impact of the restrictions closely.
Additionally, the G7 will develop measures to address the needs of the most energy-insecure nations, including those without access to Russian energy resources.
The statement stressed that the primary aim of the price ceiling is to reduce Russia’s revenue and its ability to fund actions in Ukraine. All countries are invited to participate in creating a new mechanism.
The goal is to build a broad coalition to maximize impact, inviting any country that imports Russian oil and oil products to buy them only under the ceiling price.
There is a renewed commitment to removing Russian oil and oil products from domestic markets, with the price ceiling designed to ease pressure on global oil markets.
US Deputy Secretary of State Victoria Nuland has previously warned that prices could rise sharply if Russian imports are completely banned. If this occurs, Moscow could redirect sales to other buyers such as India or China, but the price ceiling would prevent sales from exceeding the agreed price.
“Total nonsense” is how Deputy Prime Minister Alexander Novak described the plan a day earlier, saying Russia would halt oil and petroleum product supplies to countries that adopt a ceiling. He argued that any effort to restrict Russian oil interferes with market mechanisms and lacks support from major producers, including those in OPEC+. Novak claimed there had been no positive responses from other oil producers about the proposal.
As part of the sixth EU sanctions package, a ban on sea-borne purchases of Russian oil by EU members, along with petroleum products, is scheduled to take effect from February 5, 2023, following a December 5 implementation date.