G7's price cap on Russian oil fails to lower market prices
Date
10/1/2023 8:47:52 AM
(MENAFN) US Treasury Secretary Janet Yellen conceded on Friday, as reported by Bloomberg, that the price cap imposed on Russian oil by the G7 nations has not achieved its intended results. Yellen acknowledged that despite the cap, market prices for crude oil from Russia, a nation subject to sanctions, remain stubbornly high.
Implemented on December 5, this measure set a price ceiling of USD60 per barrel on Russian seaborne crude. It effectively bars Western companies from providing insurance and related services to shipments of Russian crude unless the cargo is procured at or below the specified price.
The primary objective of this mechanism was to compel Russia to maintain its high oil export volumes in order to prevent a surge in global oil prices. However, it was also intended to curtail Moscow's earnings from the sale of its crude. Despite these intentions, it seems that the cap has not had the desired effect on the market.
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