G7 finance ministers will hold talks on whether to allow the world to buy Russian oil with a price cap, a move the US says will de-escalate pressures on the energy market while reducing revenue for Moscow.
Specifically, as reported by Bloomberg citing American officials, the country’s Minister of Finance Janet Yellen and her G7 counterparts will further discuss the measure at a meeting today, Friday.
Under the plan, those who buy Russian oil at a price cap will be allowed to continue receiving critical services – such as tanker financing and insurance.
It is recalled that at this stage the European Union, the United Kingdom and Switzerland have agreed to ban their companies from providing these services for Russian oil shipments in December.
“We believe that it is the most effective way to seriously damage Putin’s income and this will result in not only a reduction in his oil income but also a decrease in global energy prices,” the White House spokeswoman said on Wednesday. House of Karin Jean-Pierre.
She added that “we’ll hear more on Friday about how this will work, and it’s not just our idea. It’s about working with our allies in the G7. So we think this will be a way to really hit Russia economically “.
As Bloomberg points out, however, it has not yet become clear what the price ceiling will be or which countries will participate in the effort.
The US and its allies have slapped a raft of sanctions on Russia after its invasion of Ukraine rattled global energy markets and sent crude prices skyrocketing. The G7, which also includes Germany, the UK, France, Italy, Japan and Canada, pledged earlier this year to reduce its dependence on Russian energy, including “phasing out or banning the import of Russian oil “.
As US officials argued, if purchases were allowed at a price ceiling or even lower, it would lead other buyers to seek a corresponding discount. That would limit market shortages, lower world prices and force Russia to take a further discount on its exports, ultimately hurting its overall revenue.
As US national security adviser John Kirby pointed out on Wednesday, “we think it’s not only an idea worth exploring, it’s an idea worth implementing, and we look forward to hearing what the finance ministers have to say at the end of the week.” .
The UK said on Wednesday it supported the plan, with Foreign Minister Nadeem Zahawi saying it would be “more effective if supported by the widest possible coalition”.
It is noted that last week US Deputy Treasury Secretary Wally Adejemo also visited India to discuss the idea of a price cap.
Source: Capital
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