The G7 countries support a plan to reduce Russian oil prices

The Group of Seven wealthy nations agreed on Friday to implement a price-fixing mechanism on Russian oil exports, aiming to limit the Kremlin’s ability to fund its war in Ukraine and better protect consumers amid rising energy prices.

Finance ministers representing the G7 countries He said They acknowledged in a joint statement that for the European Union, consensus among the 27-nation bloc is required.

“We aim to align implementation with the timetable for relevant actions under the sixth EU sanctions package,” they said.

The maximum initial price will be set “at a level based on a set of technical inputs”.

The G7 statement added that the effectiveness and impact of the price cap will be closely monitored and reconsidered as necessary. The G7 consists of the United States, Canada, France, Germany, Italy, the United Kingdom, and Japan.

Prior to the announcement, Russia had warned that it would stop selling oil to countries that impose price controls on Russian energy exports, and said that imposing restrictions on Russian crude would lead to a major destabilization of the global oil market.

The Group of Seven first agreed to explore the possibilities of imposing a ban on transporting Russian oil above a certain price in June.

It was energy analysts very skeptical On the safety of the proposal, however, he cautioned that the policy could backfire if major consumers such as China and India did not participate.

Oil prices rose on the news. international standard Brent Crude futures rose 2.7% to $94.89 a barrel on Friday afternoon in London, while West Texas Intermediate Futures rose 2.8% to trade at $89.10.

Russia’s G7 oil price cap comes as Western economic powers seek to drain Russia’s war chest.

Data from the International Energy Agency show up Russian oil exports in June fell by 250 thousand barrels per day on a monthly basis to 7.4 million barrels per day, the lowest level since August last year.

However, the Kremlin’s export revenue continued to rise by $700 million on a monthly basis. The International Energy Agency said higher oil prices helped Russia’s oil export earnings reach $20.4 billion, reflecting a 40 percent jump above last year’s average.