US will keep incentives for Moscow to continue oil exports at the “ceiling” of prices

WASHINGTON, Sep 9 – PRIME The plan discussed by the G7 countries to limit the maximum price of Russian oil implies maintaining incentives for Moscow to continue supplying “black gold” to world markets, US Deputy Treasury Secretary Wally Adeyemo said on Friday.

“Russia may threaten not to sell oil below the ceiling, but an economic policy based on not selling oil simply does not make sense. The plan to cap the price of oil provides clear incentives (for Moscow) to continue exporting oil within the established price limits,” Adeyemo said during a virtual discussion organized at the Brookings Institution site.

The United States, together with its allies, intend to set a price ceiling for oil exported by Russia above cost, but below the market level

“The price cap creates a clear economic incentive to sell… We intend to set the price cap above Russia’s marginal cost of production, at a level that is comparable to what has historically been accepted… While leaving ample room below prevailing market prices and the prices that Russia receives today” the minister concluded.

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 the Bloomberg agency, figures of 40-60 dollars are being discussed.