G7 finance ministers agreed to cap Russian oil prices

On Thursday, Russian Deputy Prime Minister Alexander Novak called the introduction of a price cap a “complete absurdity” that would destabilize the entire industry. According to him, Russia will not supply oil or oil products to countries that support the establishment of a price ceiling.

The measure will enter into force on December 5 for crude oil and on February 5 of next year for refined petroleum products. These are the same dates when, as part of the EU’s sixth sanctions package against Russia, a partial embargo on the import of Russian oil and oil products into the EU will begin to apply.

Already in June, the G7 states announced that they would consider capping Russian oil prices as another method of putting pressure on Russia for its aggression against Ukraine. At the same time, Russia is one of the world’s largest oil exporters. US Treasury Secretary Janet Yellen said the measure would also help lower global energy prices.

Novak also stated that Russian companies are ready for the European Union’s December embargo on the import of Russian oil and that they can maintain production at the current level. According to the Deputy Prime Minister’s forecast, mining may amount to 520 to 525 million tons by the end of the year. Last year, Russia extracted 524 million tons of oil.

Russia will not supply oil to countries that support the price cap

Economy

Despite falling export volumes, Russia’s oil export earnings in June rose by $700 million (17.1 billion CZK) in June from May, thanks to higher prices due to the war in Ukraine, the International Energy Agency said last month.

The G7 countries consist of Great Britain, Canada, France, Germany, Italy, Japan and the USA. Some representatives of the bloc have previously said that the price cap may not be very effective, however, unless the main importers of Russian oil, China and India, also join it. Both countries do not plan to.

European Commission (EC) President Ursula von der Leyen said on Friday that the European Union should also cap the price of gas transported by pipeline from Russia to mitigate the effects of market manipulation by Russian President Vladimir Putin. Former Russian President Dmitry Medvedev responded to her words by announcing that Moscow would stop supplying gas to the Union in that case.

The article is in Czech

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