Ceiling prices for Russian oil from the G7 and Australia after the EU

Following the European Union (EU), G7 member states and Australia have also agreed to apply a maximum price of $60 per barrel to oil shipped from Russia.

In the communiqué of the G7 member states, noting that the EU took a similar step today, it was indicated that a consensus was reached to apply a maximum price of 60 dollars per barrel to oil transported from Russia by sea.

Noting that with this decision, the G7 countries fulfilled their commitments to reduce Russia’s profit resources in the Ukraine war, it was stated that it was aimed at minimizing the negative impact of the Russia-Ukraine war on global markets.

In the statement, it was indicated that the application in question will enter into force on December 5.

WILL BE RE-EVALUATED EVERY TWO MONTHS

The G7 countries and the EU were negotiating to impose a maximum price on Russian oil. The G7 proposed last week to set a maximum price of $65 to $70 a barrel for oil shipped from Russia.

The EU Commission suggested applying a cap price of $60 per barrel of oil transported from Russia by sea to reach consensus in negotiations between member states.

In addition, a new price cap mechanism will be established in addition to the maximum price of $60 for Russian oil. The mechanism will ensure that the maximum price of Russian oil remains 5 percent below world market prices.

The maximum price applied to Russian oil will be reassessed every two months.

The application of the maximum price is expected to take effect on December 5, when the EU’s decision to cut Russia’s crude supplies by sea will become effective.

Russia produces about 10 percent of the world’s oil production. On the other hand, Russian officials announced that they would not sell oil to countries participating in the application of the maximum price. (AA)