12/03/2022 at 01:42


    The seven countries reaffirm their intention to “eliminate crude oil and oil products of Russian origin” from their “domestic markets”

    The club of industrialized nations The G7 and Australia agreed on Friday a ceiling of 60 dollars a barrel of russian crude transported by sea, in line with the decision of the countries of the European Union (EU). With this step, the United States, Canada, Japan, the United Kingdom, Italy, France and Germany – which holds the current presidency – intend to prevent Russia “from benefiting from its war of aggression against Ukraine,” they announced in a statement. In addition, the measure, which will enter into force on December 5 or “shortly thereafter”, aims to “support stability in global energy markets and minimize the economic effects of the Russian war of aggression, especially for countries low- and middle-income.”

    To implement the decision, members of the club of seven they will prohibit their shipping companies from providing services that allow the global transport of Russian crude and its derivatives unless they are purchased at or below the specified price. “We reaffirm our intention to remove Russian-origin crude oil and oil products from our domestic markets. This commitment is not modified by the implementation of the cap,” the statement stressed.

    On the contrary, the measure is aimed at allowing stable energy supplies to third countries while limiting Russia’s revenues, the G7 said. With it, the economic interests of these third countries are not harmed, since imports under the ceiling “will help to restrict energy prices and limit Russia’s ability to continue benefiting from the extraordinary profits it has been obtaining with the war”.

    Although the cap will take effect as of next Monday, December 5, a temporary exception will be included to allow transactions that affect crude oil that has already been loaded on board the corresponding vessel before that date. The club of seven further undertakes to coordinate as far as possible the implementation of the cap in order to minimize the resulting burden for companies.

    On the other hand, the statement reiterated the purpose of the G7 to introduce a cap on oil derivatives of Russian origin as of February 5, 2023, adding that there will be different limits for high- and low-value refined products. Finally, the countries reserved the possibility of reviewing the price and adjusting it “as appropriate”, taking into account factors such as its effectiveness and its potential impact for the club and its allies.

    The EU countries also reached an agreement on Friday to set a ceiling of 60 euros per barrel, at a time when the community currency is almost at par with the dollar. This decision will not directly affect the community bloc, which as of next Monday will apply a total embargo on Russian crude -except for the one that Hungary buys by pipeline- although it will prohibit European shipping companies from transporting Russian crude to third countries if it is sold above of the set price.