According to the U.S. Treasury, the Group of Seven officials have decided to evaluate the level of the price cap on Russian oil exports in March rather than January, as initially anticipated, in order to give the market time to adjust if additional caps on Russian oil products are imposed, Reuters reported.
As part of Western sanctions against Moscow for its invasion of Ukraine, G7 countries, the European Union, and Australia decided on December 5 to prohibit the use of maritime insurance, finance, and brokerage services from the West for seaborne Russian oil priced above $60 per barrel.
“The Deputies agreed that this approach will better calibrate the price cap policy for refined products, given the wide range of market prices at which these products trade,” Treasury said after U.S. Deputy Treasury Secretary Wally Adeyemo met virtually with coalition officials on Friday.
The coalition had initially intended to review the level of the cap sometime in February, two months after its implementation.
Treasury representatives have said the oil price cap has two goals: cutting Russia’s revenues by institutionalizing heavy discounts on its oil bought by big consumers like China and India, and ensuring global oil markets are well supplied.
“As long as the price cap continues to meet the Coalition’s dual goals, the Deputies agreed to undertake a review of the level of the crude price cap in March,” Treasury said.
Treasury said that choosing March as a date to review price cap allows the coalition to assess developments in global markets after implementation of the refined products caps, and to be briefed on an EU technical review of the crude price cap.