Reuters: The G7 countries want to limit the price of Russian oil at the level of $40-60 per barrel

Oleksiy Yarmolenko

The G7 countries plan to limit the price of Russian oil on the global market from December. This may cause prices to rise in the world, but in the long run it will seriously hit Russian revenues.

Reuters writes about it.

The idea of the G7 countries is that the Russians have a choice — either to sell oil at a lower than market price, or not to sell it at all and not make money from it. Countries want this price to be approximately at the level of $40-60 per barrel. In this case, Russia will receive significantly less income, but will cover the cost of its production.

An important element for the plan to work is the involvement of China and India in such a restriction. If they also agree not to buy Russian oil at a higher price, then Russia will have nowhere to sell huge volumes of oil. Since the beginning of the invasion, Russia has already been selling oil to China and India at significant discounts in order to maintain income in the face of Western sanctions.

However, the U.S. believes that even if China and India do not join the plan, it will still help lower the price of Russian oil for other consumers in Asia. In particular, if China separately agrees with the Russian Federation on a discount of 30-40%, the USA will already consider it a success.

  • During the G7 summit, the United States and its allies discussed ways to reduce the price of Russian oil on the world market. They want to see it at the level of $40-60 per barrel, which will seriously affect Russian revenues.
  • Against the background of the war, the USA and the EU gave up Russian fuel, but in stages. The EU allocated half a year to abandon oil, and up to eight months to abandon petroleum products. Oil deliveries via pipelines have not been sanctioned.