Business Essentials for Professionals


Price Cap On Russian Oil Could Be Imposed In The Coming Days

Price Cap On Russian Oil Could Be Imposed In The Coming Days
A $60 per barrel price cap on Russian oil was fixed on Friday by the European Union in the most recent efforts to severe sources of funds for Russia for funding its war on Ukraine.   
Meanwhile, according to a reported estimate from Ukrainian presidential aide Mykhailo Podolyak, between 10,000 and 13,000 Ukrainian soldiers have been killed in the war with Russia so far.
It is believed to be the first official estimate of the number of Ukrainian soldiers killed since Ukraine's military chief said in late August that nearly 9,000 soldiers had died.
According to an update from Ukraine's regional leaders, Russian forces launched a missile attack on an infrastructure facility in the southeastern city of Zaporizhzhia. Separately, nearly 40 shells were said to have been fired overnight in Ukraine's eastern Dnipro region.
According to Kremlin spokesman Dmitry Peskov, Russian President Vladimir Putin is still open to talks about a possible settlement deal. This comes after US Vice President Joe Biden stated that if Putin was looking for a way to end the war, he would be willing to meet with him.
According to a joint statement, the G-7 countries and Australia agreed to set the maximum price of seaborne Russian crude oil at $60 per barrel.
“With this decision today, we deliver on the commitment of G-7 Leaders at their summit in Elmau to prevent Russia from profiting from its war of aggression against Ukraine, to support stability in global energy markets and to minimise negative economic spillovers of Russia’s war of aggression, especially on low- and middle-income countries, who have felt the impacts of Putin’s war disproportionately,” the announcement said.
According to the joint statement, the cap will go into effect on December 5 "or very soon thereafter." A separate plan for a price limit on Russian-origin petroleum products is set to take effect on February 5.
Treasury Secretary Janet Yellen praised the European Union, Australia, and the G-7 countries for agreeing to cap the price of Russian seaborne oil at $60.
“Today’s announcement is the culmination of months of effort by our coalition, and I commend the hard work of our partners in achieving this outcome,” Yellen said in a statement.
In September, the "Price Cap Coalition" of countries announced plans to limit the price of Russian oil in order to deny Russian President Vladimir Putin a source of funding for his ongoing invasion of Ukraine. The cap is also intended to keep oil flowing on the market.
Yellen said the cap “will particularly benefit low- and medium-income countries who have already borne the brunt of elevated energy and food prices exacerbated by Putin’s war” and “enable them to bargain for steeper discounts on Russian oil and benefit from greater stability in global energy markets.”
According to a senior Treasury official, Russia earned more than $100 per barrel following the invasion of Ukraine.
“This is going to exacerbate Russia’s already poor economic and fiscal outlook,” the official told reporters. “Russia has gone from a projected $10 billion surplus in 2022 to a deficit five times that size.”
The EU will impose a crude oil embargo on Russia on December 5.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc