US working on G7 deal to cap Russian oil prices

US working on G7 deal to cap Russian oil prices
US working on G7 deal to cap Russian oil prices

The United States wants to further punish Russia by targeting its main resource, its oil. Washington is considering, in fact, a system to cap the price of it, without discouraging Moscow from selling it. Since June, the leaders of the G7 countries have agreed to work towards a cap on the price of Russian oil. Concretely, Russia would sell its oil to these countries at a price lower than the one at which it sells it today, but which would remain higher than the production price, so that it has an economic interest in continuing to sell it to them, and so that it does not cut its deliveries.

There is a significant margin between the price of production and what Russia is doing today, within which we can set the ceiling that will create economic incentives for Russia to continue producing oil, while denying them the revenue surplus they get today », said a G7 official at the end of July.

Earlier, in June, she had detailed the contours that this measure could take: We are talking about price caps or a price exception that would expand and strengthen recent and proposed energy restrictions »imposed by the United States and its allies, which would lower the price of Russian oil and squeeze Putin’s income while allowing more oil to reach the world market »she explained, adding that a price cap » would prevent collateral effects on low-income and developing countries struggling with high food and energy costs ».

And according to US Treasury Secretary Janet Yellen, the search is progressing well. On Wednesday, she said to herself really optimistic about the substantial progress that has been made by our teams and the whole of the G7 towards us achieving a price cap », during a meeting in Washington with his British counterpart, Chancellor of the Exchequer Nadhim Zahawi. She did not fail to underline the involvement of the British: The UK has been a key ally in the G7’s work to put in place a cap on the price of Russian oil »thus greeted ’s Minister of Economy and Finance.

Convince the European Union

The United States must nevertheless still convince the European Union. Indeed, the latter has taken several measures against Russian oil. Initially, on May 31, the Twenty-Seven agreed on an embargo on this hydrocarbon. The deal called for an immediate ban on more than two-thirds of Russian oil imports and ending them 90% by the end of the year. The decision, however, provides for some derogations for Hungary, firmly opposed to this embargo because of its ultra-dependence on Russian imports, and other countries worried about the economic impact of this decision. On the other hand, on December 5, the European prohibition for insurers and reinsurers to cover the maritime transport of Russian oil comes into force.

The plan wanted by the United States must therefore be finalized before this date. Washington, which hopes to rally as many countries as possible to its camp, is in fact asking for a waiver » to this ban on insurance for oil that would be shipped below the price ceiling. The subject should be on the table at the G20 summit in Bali (Indonesia) on November 15 and 16.

According to Crea, an NGO that claims to be independent since its creation in 2019 in Helsinki (Finland), last June, Russia has earned 93 billion euros in revenue from the export of fossil fuels during the first 100 days. of its war against Ukraine, a majority of which goes to the EU. It is notably thanks to China that Russia continues to draw a windfall from its oil despite the drop in demand, particularly from Europe. In May, imports of Russian oil by Beijing jumped 55% year on year. The Asian giant had thus bought some 8.42 million tonnes of oil from Russia, according to Chinese Customs. This is a much higher quantity than oil imports from Saudi Arabia, usually the main supplier of China.

The article is in French

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