The U.S. and its allies are seeking to agree on a level for a price cap on Russian oil as soon as Wednesday, with officials discussing setting it at around $60 a barrel as the group rushes to put the plan into place before Dec. 5, according to people familiar with the talks.
The price cap, which the people said could still be set as high as $70, is at the center of the West’s efforts to sanction Russia for its invasion of Ukraine. The untested sanctions design is set to begin on Dec. 5 after facing delays this fall, as the Group of Seven advanced democracies has struggled to iron out the final details of the complicated plan.
Ambassadors from the 27 European Union member states are scheduled to meet Wednesday, when they will try to come to an agreement on a price. The bloc must agree on the price cap unanimously and diplomats warned that may prove difficult. The G-7 is aiming to approve the cap in sync with the EU.
The aim of the plan, which was pushed hard by Treasury Secretary Janet Yellen, is to crimp Russian energy exports revenue while avoiding a surge in oil prices when a European embargo on Russian oil imports kicks in early next month. Despite European reluctance at the time, the G-7 first agreed on setting the oil price cap in June following Russia’s Feb. 24 invasion of Ukraine.
Under the sanctions, the G-7, EU and Australia will all ban the provision of maritime services for shipments of Russian oil unless the oil is sold below the set cap. The Western countries are hoping to take advantage of their control of much of the world’s maritime insurance, financing and shipping services to dictate the terms of Russia’s oil sales.
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