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Agreement on Russian oil price by G7 Group nations

Agreement on Russian oil price by G7 Group nations

Agreement on Russian oil price by G7 Group nations

Agreement on Russian oil price by G7 Group nations

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  • On Monday, oil prices went up because the G7 and its allies agreed to keep the price of Russian oil at $60 (£49) per barrel.
  • Opec+ is a group of 23 oil-exporting countries, including Russia, which meets regularly to decide how much crude oil to sell on the world market.
  • In Asia trading, Brent crude went up about 1% to more than $86.
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On Monday, oil prices went up because the G7 and its allies agreed to keep the price of Russian oil at $60 (£49) per barrel.

In Asia trading, Brent crude went up about 1% to more than $86.

The move, which could happen on Monday, puts more pressure on Russia over its invasion of Ukraine from the West.

It comes after the oil-producing group Opec+ agreed to stick to its plan to cut production, even though the world economy is growing more slowly and interest rates are going up.

Kang Wu of S&P Global Commodity Insights told that Opec+’s decision to keep the quota the same is an implicit way of helping the oil market.

Opec+ is a group of 23 oil-exporting countries, including Russia, that meets regularly to decide how much crude oil to sell on the world market.

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Traders are also reacting to the fact that the US job market is doing well and that restrictions on Covid have been lifted in some Chinese cities.

After a lot of people protested against China’s “zero-Covid” policy, more cities, like Urumqi in the north-west, said they would loosen restrictions.

“Early morning optimism was sparked by the idea that China might speed up reopening plans,” said Stephen Innes, managing partner at SPI Asset Management.

But he warned against “chasing oil higher with China’s reopening because there will be a huge increase in Omicron cases, which could keep mobility on the decline at least through the first quarter of next year.”

Last week, the G7 and Australia said in a joint statement that the $60 cap on Russian oil would go into effect on Monday or “very soon after.”

They also said that the goal of the measure was to “keep Russia from making money off of its aggressive war against Ukraine.”

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The G7 came up with the price cap in September. Its goal is to stop Moscow from making money from oil exports and to keep prices from going up.

It means that G7 and EU tankers, insurance companies, and credit institutions will only be able to ship Russian oil bought for less than $60 per barrel.

Because many big shipping and insurance companies are based in the G7, this could make it hard for Moscow to sell its oil at a higher price.

The G7 is a group of the seven largest so-called “advanced” economies in the world, which control most of the world’s trade and the international financial system. They are the United States, Canada, France, Germany, Italy, Japan, the United Kingdom, and Japan.

Supply impacted

Oil and gas prices have gone up because people worry that Russia’s invasion of Ukraine could cut off supplies.

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After Saudi Arabia, Russia is the second largest producer of crude oil in the world. It meets about a third of Europe’s needs.

US Treasury Secretary Janet Yellen said that the price cap would also put more pressure on Russian President Vladimir Putin’s finances and “limit the revenues he’s using to pay for his brutal invasion” without disrupting global supplies.

But the president of Ukraine, Volodymyr Zelensky, said that the cap was “weak” and not “serious” enough to hurt the Russian economy.

Russia says it won’t agree to the price cap and has threatened to stop selling oil to countries that do.

On Monday, the EU will stop letting ships bring in crude oil from Russia.

Russia will definitely feel the effects of the measures, but it will be able to lessen the blow by selling its oil to other markets like India and China, which buy the most crude oil from Russia right now.

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