Belgium, (Brussels Morning Newspaper) The G7 is considering a new plan to limit Russia’s income, according to a statement released by UK authorities.
The group of countries is thinking about blocking transport of Russian oil and petroleum products unless they are sold below a price threshold which is to be determined, Reuters reports Tuesday.
The UK pointed out in the statement that the G7 is considering “a comprehensive prohibition of all services that enable transportation of Russian seaborne crude oil and petroleum products globally, unless the oil is purchased at or below a price to be agreed in consultation with international partners.”
“In considering this and other options, we will also consider mitigation mechanisms alongside our restrictive measures to ensure the most vulnerable and impacted countries maintain access to energy markets including from Russia,” the statement notes.
While many countries imposed sanctions against Russia over the war in Ukraine and stopped importing Russian oil and gas, a move some Western leaders said would restrict Moscow’s income, China and India’s imports have reached record levels.
Initial plan backfired
The International Energy Agency pointed out in July that embargoes pushed oil prices up, with Russia’s export revenues increasing on monthly basis in June despite decline of oil exports.
According to the proposed plan, imposing a price cap on Russian oil would limit Moscow’s income despite growth of energy prices.
The Kremlin pointed out that it could ignore the price cap and sell oil to countries not following the plan.
Janet Yellen, US Secretary of the Treasury, proposed the plan during her Asian tour last month and noted that her talks with Indian officials were “encouraging.”
Some analysts and industry experts warned that the plan would not work, pointing out that Russia can export oil to Asian countries without using Western ship insurance. They added that Russia could halt some oil exports, which would further drive up energy prices.
“As we phase out Russian energy from our domestic markets, we will seek to develop solutions that reduce Russian revenues from hydrocarbons, support stability in global energy markets, and minimise negative economic impacts,” the UK statement concluded.The group has been struggling to stabilise energy prices and tackle energy shortages while imposing sanctions against Russia and adhering to green push commitments.
