G7 countries agree to set a fixed price for Russian oil – Reuters
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The publication writes that Putin could benefit from a floating price system. The fact is that the price of Russian oil will rise if the cost of Brent crude jumps due to reduced supplies.
The G7 countries, as well as Australia, have agreed to set a fixed price for Russian oil by the end of November, instead of accepting a floating rate. Reuters writes about this, citing its sources.
“The coalition has agreed that the price cap will be a fixed price that will be reviewed regularly rather than be lowered to an index. This will increase market stability and make compliance easier to minimize the burden on market participants,” the source said.
The source added that tying the price as a discount to an index would lead to too much volatility and potential price fluctuations.
The G7 is reportedly concerned that a floating price pegged below the Brent international benchmark could allow Russian President Vladimir Putin to play the game by cutting supply.
U.S. Treasury Secretary Janet Yellen and other G7 officials argue that price caps due to begin Dec. 5 for oil and Feb. 5 for petroleum products will cut Russia's funding without reducing deliveries to consumers.
We also recall that Russia sent a valuable cargo to the DPRK. Rail freight traffic between the Russian Federation and the DPRK was interrupted due to covid restrictions. Russia resumed deliveries by sending a train with 30 thoroughbred horses.