G7 price cap on Russian crude oil

A price cap set by Western allies on Russia’s seaborne oil exports aims to weaken the Kremlin’s ability to wage war in Ukraine
 

RUSSIAN REVENUES FROM FOSSIL FUEL COMMERCE
Since start of Ukraine war on Feb 24, 2022*
    
Crude oil
$123bn

70%-85%  
Percentage of Russia’s oil exports carried by tankers rather than pipelines

Natural gas (pipeline) 
$56bn

$40bn
Oil products and chemicals

Coal
$21bn

Liquefied natural gas (LNG) 
$16bn
 
Total
$250bn+

     
*Data to Nov 28, 2022


MAIN ELEMENTS OF PRICE CAP

Level: Set at $60 per barrel – high enough to provide incentive for Russia to keep selling oil on global markets

Entry into force
Ships loaded before Dec 5 deadline have 45-day transition period to carry their cargo and unload by Jan 19

Adjustments: Level to be reviewed every two months. Transition period of 90 days after each change in cap

Penalties: Vessels intentionally carrying Russian oil above price cap face restrictions for 90-day period after cargo is unloaded

Enforcement   
Covers G7 countries, EU and Australia. Firms barred from dealing with Russian cargoes unless oil is bought below cap

Companies based in G7 provide about 90% of world’s maritime insurance market
  

Sources: CREA, Reuters, Euronews, U.S. Treasury Dept. 
Picture: Getty Images 
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