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G7 delays revision of Russian oil price ceiling – Reuters

G7 delays revision of Russian oil price ceiling – Reuters

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Russian producers have found ways to sell oil above the limit, but the G7 isn’t planning to act anytime soon.

The G7 countries and their allies have postponed the revision of the Russian oil price cap scheme despite the fact that Russian raw materials are trading above the limit. This was reported by Reuters on September 6, citing sources.

It was noted that Russian producers have found ways to sell oil, bypassing the use of Western ships and insurance services, which makes it difficult to monitor compliance with the introduced limit.

Initially, EU countries agreed to review the price cap every two months and adjust it if necessary, while the G7 was supposed to do it “not necessarily.”

However, the G7 has not reviewed the restrictions since March and, according to Reuters sources, does not plan to do so anytime soon.

“Some EU countries are interested in the review, but they say that the United States and members of the G7 have little desire to make changes,” the agency’s interlocutors said.

Earlier, Russia’s Finance Ministry reported that the average price for top-grade Urals recovered to $74 per barrel in August, well above the upper limit.

Russia cut its exports of oil and oil products immediately after the price cap was introduced because it was struggling to find enough ships to transport the raw materials.

Subsequently, the country was able to move most of its exports into the hands of domestic or foreign shippers, who did not require Western insurance coverage.

Reuters estimated that at least 40 intermediaries, including companies not previously involved in the business, handled at least half of Russia’s total exports of crude oil and petroleum products between March and June.

According to LSEG data, Russian oil has been trading above the upper limit since mid-July, and has now reached a level of around $67 per barrel. Russian oil products such as heating oil and diesel have also exceeded their limits.

Recall that the G7, together with the European Union and Australia, introduced a mechanism to limit prices for Russian oil in December of last year, and since February – for gasoline.

It allows third countries to purchase Russian fuel using Western ship insurance as long as there is evidence that the purchase will not exceed the $60/bbl price limit for crude oil, $45/bbl for fuel oil, and $100/ bbl for gasoline and diesel.

Earlier, the US State Department said that limiting the price of Russian oil continued to work, as it helped to reduce Russian revenues.

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Source: korrespondent

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