The Group of Seven countries agreed to move forward with setting a ceiling for Russian crude oil prices, in an attempt to reset global crude prices and reduce Russia's revenues from oil sales.

The West aspires in the first place to defeat "financially" Russia, which is reaping the benefits of high prices for conventional energy, such as crude oil, natural gas, and even coal.

This proposal dates back to the beginning of last April, when the price of a barrel of oil was $120, but the West sees its realization as a major step towards closing the foreign exchange arteries to Moscow.

But the West - led by the United States and the European Union - is trying to move forward with the proposal without its decisions causing oil prices to rise further.

Currently, the price of a barrel of Brent is about $95 on average, which the West sees as $30 more than the acceptable average for it.


Russia is normally considered the third largest producer of crude oil after the United States and Saudi Arabia, with an average daily production of 11 million barrels, of which it exports about 5 million barrels per day, and 2.8 million barrels per day of derivatives.

On Friday, the finance ministers of the seven countries (Canada, France, the United Kingdom, Japan, the United States, Germany and Italy) agreed to continue with the scheme to set a ceiling for the price of Russian oil.

Russia has stated that it will not stand idly by in front of the West's attempts to set a ceiling for its oil, and one of the options for the Kremlin may be to ban the export of Russian crude to ignite the markets at high prices.

What does project pricing mean?

The seven powers want to set a ceiling on the price of a barrel of Russian crude oil, so that consuming countries are obligated not to exceed it in purchase contracts from Russia.

But the seven countries have not set any approximate price for the ceiling they aspire to, and it is expected that this item will be the last point in the project, after agreement with major consumers of Russian crude.

These forces want, behind the decision, to reduce global crude oil prices, by providing Russian oil at a reduced price in favor of consumers, an issue that may not be more important than the second issue.

The second issue is the financial pressure on Moscow, which uses the prices of crude oil, natural gas and coal as a major source of income and a channel for financing the war against Ukraine.

But the price journey is still long, as the seven powers have to convince the two largest consumers of Russian crude oil, namely China and India, which have not hinted at any approval of the Western plan.

China is the largest importer of Russian crude oil with more than one million barrels per day, as well as India, and they - before this plan - benefited from Moscow's discounts on their purchases.

The Western proposal provides for a ban on insuring shipments of Russian crude oil to global markets, which is a strong point in the interest of these countries, which own nearly 90% of the insurance companies insured on maritime navigation.

Russia, in turn, has stated that it will not stand idly by in front of the West's attempts to set a ceiling for its oil, and one of the options for the Kremlin may be to ban the export of Russian crude to ignite the markets at high prices.

Russia is actually responsible for producing about 10.5% of the global demand for crude oil, a large amount that may impair the achievement of the goals of Western powers, especially with the decline in global investments in fossil energy projects.


Indeed, Saudi Arabia and the UAE - two of the world's most surplus countries, with a production capacity of about 2-3 million barrels per day above their actual production - said that the global production market is close to reaching its maximum production capacity.

The Western proposal also provides for a ban on insuring shipments of Russian crude oil to global markets, which is a strong point in the interest of these countries, which own nearly 90% of insurance companies insuring maritime navigation.

The seven countries aspire to implement the plan to set the price ceiling by December 5th for crude oil, and February 5th for derivatives.