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G7 and Australia agreed on a fixed price ceiling for oil from Russia Russian news EN

Reuters: G7 and Australia agree to impose a fixed ceiling on oil prices from Russia

G7 countries (Great Britain, Germany, Italy, Canada, USA, France and Japan) and Australia agreed to set a fixed price ceiling for Russian oil. This is reported Reuters with reference to sources.

The coalition agreed that the price cap would be a fixed price that would be reviewed regularly and not a discount to a price index.

Reuters

Linking the price as a discount to any index, according to the interlocutors of the agency, would lead to too much volatility and possible price fluctuations. At the same time, the fixed price will improve market stability and ease compliance to minimize the burden on market participants, experts say.

The price has not yet been set, several sources said, and should be approved in the coming weeks. The countries also agreed to regularly revise the fixed price “as needed”.

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Price ceiling for Russian energy resources

October 5 European Union approved the eighth package of sanctions against Russia, according to which a ceiling on prices for Russian oil is introduced. They mean ban for the transportation of oil by sea to third countries, if the cost of fuel on board is above the established limit.

Presumably, the price ceiling can be set in range at 63-64 dollars per barrel. It is noted that the average price of Russian oil supplied abroad for several years was taken as a basis.

Thus, Western countries want to reduce Russia’s income in order to reduce the opportunities Moscow finance the fighting Ukraine. On December 5, measures for oil will come into force, on February 5, 2023 – for oil products.

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In the Kremlin reminded West about the possible consequences of such a measure. According to the presidential press secretary Dmitry PeskovRussia will not to supply fuel to those countries that have introduced such restrictions. President of Russia Vladimir Putin notedthat the implementation of such a measure will only lead to higher prices.

Oil production in Russia

Vice Prime Minister Alexander Novak informedthat the volume of oil production in Russia remained at the September level – 9.9 million barrels per day. Novak added that production will remain at the same level in November, while the dynamics in December will depend on the effect of European sanctions, which will come into force on December 5.

9.9million

barrels of oil per day produced by Russia in October

According to the Ministry of Finance, the average price of Russian Urals oil in the first 10 months of the year amounted to $79.57 per barrel, in October – $70.62 per barrel. At the same time, the average price for January-October turned out to be higher than for the same period in 2021 ($67.51), but in October the indicator dropped 1.15 times year-on-year (the previous level was $81.49).

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