G7 Weighs Russia Oil Price Cap

Group of Seven nations are discussing a cap on the price of Russian oil that would work by imposing restrictions on insurance and shipping, according to people familiar with the matter.

G7 Weighs Russia Oil Price Cap

President Vladimir Putin’s invasion of Ukraine and its economic fallout are the key topics under discussion at a three-day summit under way in the Bavarian Alps. G-7 states are seeking ways to limit the Kremlin’s energy revenue while mitigating the impact on their own economies amid surging inflation and efforts to curb a reliance on Russian oil and gas.

European Council President Charles Michel confirmed that leaders were planning to discuss the proposed cap in detail, but that there were “many challenges” to be overcome.


“We are ready to take a decision together with our partners, but we want to make sure that what we decide will have the negative effect on Russia and not a negative effect on ourselves,” Michel told reporters at the summit.
 
The European Union agreed last month to introduce a ban on insurance related to the transportation of Russian oil, and any move to add on a waiver would require the backing of all 27 member states. Some officials have raised concerns about re-opening that legal text as it took weeks to agree in the first place. Still, incorporating a new transportation ban in any mechanism could help to soften objections linked to weakening the insurance ban. 
 
A mechanism linked to the shipment of oil could be more palatable to other buyers of Russian supplies, such as India, which would be able to insure and transport their shipments provided the price was in line with any agreed threshold. Prime Minister Narendra Modi is also due to attend the G-7.
 
 
 
 
 
 
 
source of the news:bloomberg

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