Weeks of negotiations have led to a result.
G7 countries and Australia agreed to establish a fixed price for Russian oil instead of accepting a floating rate. This was reported by Reuters citing sources.
“The coalition agreed that the cap would be a fixed price that would be reviewed regularly, not a discount to the index,” a source in the coalition said.
According to the coalition members, this will strengthen the stability of the market and simplify compliance with the requirements to minimize the burden on its participants.
The starting price itself has not been set at this time, it will be done in the coming weeks. The coalition partners agreed to review the fixed price regularly as needed.
Another source said the coalition was concerned that a floating price pegged to the international Brent benchmark could allow Russian President Vladimir Putin to use the mechanism to reduce supply.
“Putin stands to benefit from a floating price system, as the price of his country's oil will rise if Brent jumps due to a reduction in oil from Russia, one of the world's largest oil producers. The disadvantage of the agreed system of fixed prices is that the coalition will have to meet more often to review it regularly,” the source said.
Also read: Russia is able to bypass the oil price limit set by the G7 – Reuters
There has been no official comment from the Ministry of Finance or the embassies of the coalition members, which includes the G7 countries, the European Union and Australia, so far.
The US has reportedlyhad to review the plan on limiting the price of Russian oil due to investor skepticism and the growing risk in financial markets caused by the volatility of oil and the efforts of the central bank to curb inflation.
Russia has announced that it will stop supplying oil to those countries who are planning to introduce price restrictions on it.
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