As part of the sanctions imposed on the Russian Federation as a result of the Russo-Ukrainian War, on September 2, 2022, finance ministers of the G7 group of nations agreed to cap the price of Russian oil and petroleum products in an effort intended to reduce Russia's ability to finance its war on Ukraine while at the same time hoping to curb further increases to the 2021–2022 inflation surge.[1]
In 2022 the Russian Federation was cushioned against energy sanctions because of a global rise in oil and gas prices. The rationale for the price cap is to remove that added value so that revenues earned by Russia are restricted and should not rise if world oil and gas prices increase again in the future. In addition, it will complicate maritime oil shipments for Russia and further restrict the amount of oil Russia can sell and ship to customers, further reducing revenue.[2]
The 2022 Russian crude oil cap would be enforced by a maritime attestation that Russian crude was purchased below a certain set price, irrespective of market conditions. On 3 December 2022, this price cap has been set at US$60 per barrel.[3] G-7-based finance companies would only be allowed to provide transport and other services to Russian-based crude under these conditions.
Flow of Russian oil through pipelines has been exempted from the price capping on which land locked countries like Hungary is mostly dependent on for supply.[4]
G7 and EU countries duplicated the price cap system over crude oil to provide a price cap on petroleum products from Russia,[5] the price cap on refined oil products came into effect in early 2023.
By May 2023 the G7 countries considered the sanctions had been successful in achieving oil supply stability and reducing Russian tax revenue.[6] December 2023 saw oil future prices 10% lower than at the start of the year.[7]
{{cite web}}: CS1 maint: multiple names: authors list (link)
Stan was invoked but never defined (see the help page).trea185 was invoked but never defined (see the help page).