G7 finance ministers agree to impose price cap on Russian oil

Group of Seven finance ministers agreed on Friday to impose a price cap on Russian oil aimed at slashing revenues for Moscow’s war in Ukraine while keeping crude flowing to avoid price spikes, but their statement left out key details of the plan.

The ministers from the club of wealthy industrial democracies confirmed their commitment to the plan after a virtual meeting. They said, however, that the per-barrel level of the price cap would be determined later “based on a range of technical inputs” to be agreed by the coalition of countries implementing it.

“Today we confirm our joint political intention to finalise and implement a comprehensive prohibition of services which enable maritime transportation of Russian-origin crude and petroleum products globally,” the G7 ministers said.

The G7 consists of Britain, Canada, France, Germany, Italy, Japan and the US.

The ministers said they would seek a broader coalition of oil importing countries to purchase Russian crude and petroleum products only at or below the price cap.

Enforcing the cap would rely heavily on denying London-brokered shipping insurance, which covers about 95 per cent of the world's tanker fleet, and finance to cargoes priced above the cap. But analysts say that alternatives can be found to circumvent the cap and market forces could render it ineffective read more

Despite Russia's falling oil export volumes, its oil export revenue in June increased by $700 million from May due to prices pushed higher by its war in Ukraine, the International Energy Agency said last month.