Energy: Westerners will cap the price of Russian petroleum products

Oil tankers in the port of Nakhodka (Russia), on December 4, 2022 (illustrative image).

© Reuters/Tatiana Meel

Text by: RFI Follow

1 min

In the wake of an agreement by the European Union, the G7 and Australia have agreed to cap the price of Russian petroleum products.

The mechanism is due to come into force this Sunday, February 5, at the same time as the European embargo or "

 very shortly after

 ".

Stated objective: “ 

Prevent Russia from profiting

 ” from the price spike linked to the war in Ukraine and “ 

support the stability

 ” of the market.

What does this agreement provide? 

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The agreement corresponds to the proposals made by the European Commission.

Concretely, for the most expensive products, such as diesel, the maximum price per barrel is set at 100 dollars.

For less refined products such as heating oil, the ceiling is set at 45 euros.

Boats from partner countries

This concerns products transported by vessels from partner countries.

Above these amounts, companies based in the EU, G7 and Australia will be prohibited from providing services that allow shipping, including insurance.

However, the G7 countries handle approximately 90% of global cargo.  

Poland and the Baltic States were demanding, according to diplomatic sources, a lower price to further penalize Moscow.

But the equation is tricky.

The powers of the G7 and Australia intend to hit Moscow on the wallet without deterring Russia from continuing to supply the world market.

This would have the effect of destabilizing trade and could cause prices to soar.

Unbalanced markets? 

Moscow also communicates on this theme.

Russia assures that the European embargo will further unbalance the international energy markets and says it is taking measures to cover its interests. 

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