G7 countries and Australia joined the EU on Friday in adopting a $60 per barrel price cap on Russian oil.
A statement said the EU took a similar step earlier in the day and countries reached a consensus on a maximum price of $60 for seaborne Russian-origin crude oil.
“With this decision today, we deliver on the commitment of G7 Leaders at their summit in Elmau (Germany) 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,” it added.
The decision on the price cap on Russian-origin petroleum products will take effect Feb. 5, it stated.
Price cap discussed for long time
The G7 and EU countries were negotiating about imposing a price cap on Russian oil. Last week, the G7 proposed a price cap of $65 to $70 per barrel.
The European Union Commission proposed a $60 cap for oil transported from Russia by sea to reach a consensus on negotiations between member states.
In addition to the cap, the EU is working on a new price-limiting mechanism that will allow for a reassessment of the price cap every two months.
The mechanism will ensure the new price cap is kept 5% below market prices.
The cap will take effect Dec. 5 in conjunction with the EU’s decision to cut off crude oil supplies from Russia by sea.
Russia produces about 10% of the world’s oil production.
Russian officials announced that they would refuse to sell oil to countries agreeing to the price cap.