U.S. And G7 Allies Join EU On Russia Oil Price Cap

U.S. and its G-7 allies, as well as Australia on Friday reached a consensus to set the maximum price of seaborne Russian crude oil at $60 per barrel, following the EU's agreement to cap the price of Russian oil at the same price, TURAN's Washingron correspondent reports.

The move is part of Western efforts to reorder the global oil market to prevent price spikes - and starve Vladimir Putin's Russia of funding for his war in Ukraine.

The joint G7 statement said the cap will be implemented on December 5 “or very soon thereafter.” Maximum prices for high-value and low-value refined products will be announced separately.

U.S. Treasury Secretary Janet Yellen said in a separate statement that the EU agreement will help restrict Putin’s "primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies".

Yellen added the cap will particularly benefit low- and medium-income countries which "have already borne the brunt of elevated energy and food prices exacerbated by Putin’s war” and “enable them to bargain for steeper discounts on Russian oil and benefit from greater stability in global energy markets.”

Russia was earning more than $100 per barrel after the Ukraine invasion, according to a senior U.S. official. “This is going to exacerbate Russia’s already poor economic and fiscal outlook,” the official said, adding that Russia has gone from a projected $10 billion surplus in 2022 to a deficit five times that size.

Alex Raufoglu

Washington D.C.