“G7, Push for Price Cap Sanctions on Russian Oil”

Three-Stage Approach Expanding to Crude Oil, Diesel, and Naphtha
"Expected to Be More Effective Than a Complete Import Ban"

[Asia Economy Reporter Hyunji Kwon] The Group of Seven (G7) plans to implement new sanctions imposing a price cap on Russian oil products, Ben Harris, Deputy Assistant Secretary for Economic Policy at the U.S. Department of the Treasury, announced on the 3rd (local time).

According to major foreign media, Deputy Assistant Secretary Harris stated at a conference held in Geneva, Switzerland, on the same day, “A sales price cap has not yet been set for Russian oil.” He added, “Currently, Russia is maintaining production levels above the marginal cost even at its most expensive oil wells.”

The implication is that without setting a price cap to limit Russia’s profits from oil transactions, the sanctions’ effectiveness would be diminished.

Accordingly, the G7, together with European Union (EU) countries, is expected to gradually apply the price cap on Russian oil products starting December 5. The first target will be Russian crude oil, followed by a three-phase approach expanding to lower-priced petrochemical products such as diesel and naphtha, Deputy Assistant Secretary Harris explained.

The G7 expects this measure to have a greater impact than a complete import ban on Russian oil products.