Finance ministers from the G7 grouping of leading democracies today agreed to set a price cap on Russian oil exports — an effort to limit the Kremlin’s ability to finance its war in Ukraine.
They called for plan to set a price limit and only permit service providers to continue to do business with Russian seaborne oil and petroleum products if they were sold at or below that level. The price cap will be set together with a broad group of countries.
The plan would rely on refusing Russia access to the vital London insurance market, which covers 95 percent of the global oil shipping industry, if it does not respect the price cap.
“We will curtail Putin’s capacity to fund his war from oil exports by banning services, such as insurance and the provision of finance, to vessels carrying Russian oil above an agreed price cap,” said U.K. Chancellor of the Exchequer Nadhim Zahawi.
Despite efforts by the EU and U.S. to limit Russian oil sales, Moscow has boosted exports to countries like India and China.
“The G7 will significantly reduce Russia’s main source of funding for its illegal war, while maintaining supplies to global energy markets by keeping Russian oil flowing at lower prices,” U.S. Treasury Secretary Janet Yellen said.
Russia is strongly opposed to any effort to set a price cap.
Russian Deputy Prime Minister Alexander Novak threatened to stop selling oil to any country that adopts a price cap mechanism.