G7 to set ceiling on Russian oil prices until December 5

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G7 will set a ceiling on Russian oil prices until December 5

The Kremlin will face a choice: agree to cheaper but profitable supplies, or, in fact, be left without income due to the December EU embargo .

A group of seven countries with the most developed economies plan to agree on a mechanism that limits the price of Russian oil exports. It is planned to approve this mechanism by December 5, when EU sanctions will come into force, prohibiting the import of Russian crude oil by sea. This is reported by Reuters, citing a senior G7 official.

According to the official, who asked not to be named, the goal is to have time to develop a restrictive mechanism by the time the sanctions come into force.

Representatives of the G7 group of countries — the UK, Germany, Italy, Canada, the US, France and Japan — said last month that they would consider setting limits on the price of Russian oil in order to reduce Moscow's financial flows through which Russian troops in Ukraine are financed.

In the future, the G7 countries tried to win over China and India, to which Moscow sells oil at a reduced price.

“We have already received messages from several Asian countries that are interested in joining the coalition, or in a better understanding of what level the price will be set, in order to use this information to improve their positions in negotiations with the Russians on the future contracts,” said a G7 spokesman.

China and India are also interested in reducing their oil import costs.

The price set by the G7 will be made public.

< h2>What does the oil price ceiling provide for?

It is in the interests of the G7 to ensure that the price of Russian oil is set by a cartel of buyers above the cost of its production in the Russian Federation. Thus, the Kremlin will be interested in continuing supplies, but at a price lower than the current one.

Thus, the Kremlin will face a choice: to accept lower, but profitable prices, or to remain practically without income due to the fact that the EU oil embargo comes into force in December.

According to the official, the Russian Federation will find it difficult to sell its oil to other countries, because the EU sanctions imply a ban on all financial services related to the trade in Russian oil, including insurance and financing of transportation and shipping.

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