The G7 coalition, in a latest move will keep the capping of $60 per barrel when it comes to seaborne Russian oil, an official confirmed. This is despite the global crude prices which are rising and also calls by certain countries so as to lower revenues of Moscow.
Apparently, the G7 as well as Australia have come up with the decision to maintain capping over the past few weeks after a review was held in December of the $60 price. The idea is to lessen Russia’s capacity to finance its war.
This comes post four weeks of benchmark oil price gains that were helped by the output cut that was announced by OPEC+, which has the organisation of petroleum exporting nations as well as allies that are led by Russia. It is well to note that the Russian crude has been sold at a discounted price of $30 to Brent, as per an official.
As per the coalition officials, the price cap happened to be working to limit the Russian revenue as well as maintain market stability; however, it also said that they would partner to make sure to the point monitoring as well as enforcement. The coalition is also seeking to intensify efforts when it comes to taking care of the price cap as well as the sanctions that have been imposed by Russia, including the use of deceptive practises so as to access insurance as well as other coalition services when it comes to oil being traded above the cap.
Notably, the collation members are planning to share guidance so as to help the service providers pinpoint the red flags for evasion, like the manipulation of ships tracking of location or even failure when it comes to itemising shipping, freight, and insurance costs separately from oil.
The US Treasury also issued a warning on April 17 about a probable evasion of the price cap on oil that is being exported through the Eastern Siberian Pacific Ocean pipeline as well as eastern Russian ports.
The US Treasury Department recommended that the traders go on to retain their documents that showed Russian oil as well as oil products were purchased either at the cap or below it. Significantly, the oil price cap bans G7 as well as EU companies from offering insurance, transportation, and financing services for Russian oil and products if they are being sold above the price cap.
As expected, Britain and the US too have imposed Russian oil import restrictions. According to an official, the recent IEA report stated that the G7 sanctions had indeed been effective in not putting a halt on global crude and product supplies, but at the same time, they had also curtailed Russia’s ability to get the much-needed export revenue.
As per the IEA, March oil revenue of Russia increased by $1 billion M-o-M to $12.7 billion; however, it was 43% lower than the year before.