This Aug 12, 2022 aerial view shows the Vladimir Arsenyev tanker at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia. (TATIANA MEEL / REUTERS)
WASHINGTON/BRUSSELS – The Group of Seven (G7) nations and Australia on Friday said they had agreed a $60 per barrel price cap on Russian seaborne crude oil after European Union members overcame resistance from Poland and hammered out a political agreement earlier in the day.
The decision must be officially approved with a written procedure. Details of the deal are due to be published in the EU legal journal on Sunday.
The chair of the Foreign Affairs Committee of the State Duma, the lower house of Russia's Federal Assembly, told TASS news agency on Friday the EU was jeopardizing its own energy security.
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The price cap aims to reduce Russia's income from selling oil, while preventing a spike in global oil prices after an EU embargo on Russian crude takes effect on Dec 5
Under the price cap, insurance, finance and other services for Russian oil shipments will be banned if oil sells for more than $60 a barrel.
The EU agreed the price after holdout Poland gave its support, paving the way for formal approval over the weekend.
The G7 and Australia said in a statement the price cap would take effect on Dec 5 or very soon thereafter.
The nations said they anticipated that any revision of the price would include a form of grandfathering to allow compliant transactions concluded before the change.
"The Price Cap Coalition may also consider further action to ensure the effectiveness of the price cap," the statement read. No details were immediately available on what further actions could be taken.
The price cap, a G7 idea, aims to reduce Russia's income from selling oil, while preventing a spike in global oil prices after an EU embargo on Russian crude takes effect on Dec 5.
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Finance ministers of the G7 countries agreed in September to impose a price cap on Russian oil.
Calling the G7's plan completely absurd, Russia's Deputy Prime Minister Alexander Novak has said that his country would not supply oil and petroleum products to those countries that support the price cap, warning that the measure could destroy the global oil market.