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G7 may completely ban oil from Russia to deprive it of big profits

Some traders and oil market analysts have expressed doubts that a price ceiling for Russian oil will work.

The G7 is exploring ways to limit Russia's oil revenues / photo ua.depositphotos.com

If Russia does not take into account limiting the price of its oilthe G7 countries are considering a complete ban on the transportation of Russian oil among the options to deprive Moscow of huge revenues amid its invasion of Ukraine.

This is stated in the statement of the Foreign Ministers of the G7 countries, published by the UK, writes Reuters.

“We are considering the possibility of a complete ban on all services that allow the transportation of Russian oil and oil products around the world by sea, except for cases when this oil is purchased at a price not higher than that which will be agreed upon in consultation with international partners,” the statement said.

At the same time, representatives of the G7 countries allow mitigating mechanisms that will ensure access to energy markets, including from Russia, for the most vulnerable countries.

Reuters reminds that despite the fall in Russian oil exports to the lowest level since August last year, its export earnings in June increased by $700 million compared to the previous month due to higher prices.

Limiting the price of Russian oil

Recall that the idea of ‚Äč‚Äčintroducing marginal prices for Russian oil was put forward at the G7 leaders’ summit at the end of June. Thus, the countries of the “big seven” intend to limit Moscow’s income from the sale of oil.

US Treasury Secretary Janet Yellen pitched the idea to Asian leaders during an overseas tour last month and told Reuters she had encouraging talks with India.

Some oil traders and analysts have expressed doubts that the price cap will work as Russia has found ways to ship its oil to Asia without resorting to Western ship insurance. Moscow may also completely stop the export of part of the oil, which will lead to a further increase in energy prices.

G7 members have been trying to find ways to fill the energy gap and deal with rising prices while sticking to their climate commitments.

“As we gradually withdraw Russian energy resources from our domestic markets, we will strive to develop solutions that will reduce Russia’s hydrocarbon revenues, maintain stability in global energy markets and minimize negative economic consequences,” the G7 said in a statement.

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Embargo on Russian oil

As UNIAN previously reported, on May 31, President of the European Council Charles Michel announced that the leaders of the EU countries had reached an agreement on ban on the export of Russian oil.

According to European Commission President Ursula von der Leyen, oil embargo will cut about 90% of oil imports from Russia to the countries of the European Union by the end of this year.

Bloomberg later reported that Russia continues to make big profits from the sale of oil.

The European Union plans to ban sea imports of crude and refined oil from Russia by 2023. The US and its allies want to cap Russian oil prices at between $40 and $60 a barrel.

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