MOSCOW, 9 Sep — PRIME. The price ceiling for Russian oil, which the G7 countries plan to introduce, should be set taking into account the cost of production and with little incentive, Reuters writes, citing US Treasury Assistant Secretary Elizabeth Rosenberg and an unnamed European official.
“There are several key points that we take into account at what level prices should ultimately be set, including the cost of producing Russian oil … The ceiling price should be set above the cost of producing Russian oil and take into account historical prices,” Rosenberg said at a briefing. . According to her, the G7 countries will work out the key details of the implementation of this plan in the coming weeks.
“The idea is to continue to encourage Russian oil producers to export by guaranteeing a price that matches their cost of production, with little incentive,” a European official told Reuters.
This could mean a potential limit of around $60 per barrel, according to experts cited by the agency, as Russian Urals oil traded at $50 to $70 per barrel in 2019.
On September 2, the finance ministers of the G7 countries (Great Britain, Germany, Italy, Canada, the USA, France and Japan) confirmed their intention to impose price restrictions on Russian oil as part of the expansion of sanctions. It is planned that the price limit will be introduced on December 5 for oil and on February 5, 2023 for oil products. Russian representatives warned in response that the countries that would apply the limits would be left without Russian oil exports.
The level of the marginal price for Russian oil has not yet been approved. At the beginning of June there were proposals to set the limit at half the current price. According to Bloomberg, figures of $40-60 are being discussed.