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G7 discusses Russian oil price cap with India and China

G7 discusses Russian oil price cap with India and China

G7 discusses Russian oil price cap with India and China

Russian crude has been selling at steep discounts of $30 to $40 per barrel – Google

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  • The G7 democracies have had cordial and fruitful discussions with China and India regarding a plan to control the price of Russian oil.
  • Russia’s crude sells at discounts of $30 to $40 per barrel compared to benchmark Brent crude prices of $110 to $120 per barrel.
  • India and China have upped their purchases of Russian crude despite Western sanctions.
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WASHINGTON: The G7 democracies have had cordial and fruitful discussions with China and India regarding a plan to control the price of Russian oil, a source involved in the G7 discussions said Tuesday, adding that China and India would have incentives to cooperate.

The source said the price-per-barrel cap hasn’t been set, but it must be high enough to encourage Russia to keep producing oil.

Due to Western sanctions over Moscow’s invasion of Ukraine, Russian crude sells at discounts of $30 to $40 per barrel compared to benchmark Brent crude prices of $110 to $120 per barrel.

G7 leaders agreed Tuesday to consider a ban on transporting Russian oil sold over a particular price to decrease Moscow’s earnings and war chest.

US Treasury Secretary Janet Yellen has recommended a cap as a method to cut Russia’s oil revenues while preserving supplies in the market and avoiding a price surge that may trigger a recession.

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The source said G7 governments were still assessing which oil transport services may be withdrawn for cargo exceeding the price cap and were considering direct bans on shipping, insurance, trade finance, and cargo brokering.

India and China have upped their purchases of Russian crude despite Western sanctions.

The insider said the arrangement would allow Beijing and New Delhi to buy Russian petroleum at lower prices.

According to a source, if Russia refuses to sell its crude at the capped price, it will have few options to sell it at higher rates due to the limited number of ships available outside of London-based insurance and financing markets.

The person said that with limited storage space, Russia would have to cut production, lowering cash flow and harming its energy sector.

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