G7 Price Limit Proposal Not Enough To Torture Russia


 The G7 countries' proposed price cap of $65-$70 a barrel on Russian oil will have little impact on Moscow's earnings, according to five industry sources.

This is because the price is generally in line with what Asian buyers pay.

The G7, including the United States as well as the rest of the European Union (EU) and Australia plan to implement price caps on Russian oil exports by sea from December 5.

The goal of those countries to impose price caps is to reduce the Kremlin's income to finance its war in Ukraine.

It is also designed to avoid major disruptions to the global oil market that would drive prices higher.

As context, Moscow has profited greatly from the surge in world commodity prices as a result of its aggression in Ukraine.

Oil and gas exports are forecast to account for 42% of Russia's revenue this year at $196 billion, according to the country's finance ministry.

Turning to the current oil market, Brent futures edged lower at $85 a barrel while US WTI was down at $77 a barrel.

Gloomy sentiments as a result of the worsening Covid-19 contagion in China caused oil prices to weaken around the lowest level.