G7 and Australia have reached an agreement to impose price caps on Russian-origin petroleum products, the US Treasury reported.
“Today’s agreement builds on the price cap on Russian crude oil exports that we set in December and helps advance our goals of limiting Russia’s key revenue generator in funding its illegal war while promoting stable global energy markets,” Treasury Secretary Janet Yellen said in a statement.
The “price cap coalition” agreed to impose two limits: the first price cap is for the high-quality refined fuels trading at higher prices than crude oil, such as diesel and petrol, and will be set at $100 per barrel. The second price cap of $45 will be used for lower-grade products such as fuel oil.
The EU along with the “price cap coalition” officially approved the decision to impose a price limit on Russian-origin petroleum products, the European Commission said in a statement.
Just like G7, Brussels imposed two price caps: $100 per barrel for high-grade products and $45 for lower-quality oil fuels.
The EU also clarified that the sanction will come into effect on 5 February. The commission included a 55-day wind-down period provision to allow products purchased before the price cap comes into effect to be delivered.
Treasury Secretary Janet Yellen signed the order to impose the price cap starting on 5 February. At the same time, the agency clarified that the restrictions would not apply to petroleum product supplies to Bulgaria, Croatia and landlocked EU countries. The Treasury explained the decision by citing the sixth package of sanctions against Moscow that makes temporary exceptions for European states that rely heavily on Russian fuel.
On 3 February, Bloomberg and Reuters reported that the EU had agreed a price cap on Russian petroleum products at $100 per barrel.
In late January, a Bloomberg source shared an insight that G7 (Canada, France, Germany, Italy, Japan, UK, US) had proposed to the EU to impose a price cap on Russian diesel at $100-110 because Washington and its allies were trying to avoid any serious disruptions on the energy market.
The European Commission, according to the agency, earlier suggested a price cap within $100.
