| 20 April 2024, Saturday |

Russia warns that G7 attempt to cap oil price risks higher prices

The Group of Seven’s efforts to restrict oil prices, according to Maria Zakharova, a spokesperson for the Russian foreign ministry, may instead push up oil prices.

She said during a weekly briefing, “Those proposals are hazardous and anti-market.”

In an effort to put more pressure on Moscow to cease what the Kremlin refers to as a “special military operation” in Ukraine, U.S. Treasury Secretary Janet Yellen originally proposed the cap scheme last month. Both the final agreement’s structure and price point are still to be disclosed.

The United States and European Union have announced restrictions on Russian oil purchases as a way of punishing Moscow.

Russian oil has already sold with a hearty discount to global grades amid difficulties with financing and logistics.

The price of Russian Urals blend stands at around $75 per barrel, in comparison to the Brent benchmark front-month futures of just below $100. Russia had initially drafted its 2022 budget using the Urals average price of $62.2 per barrel.

Zakharova also commented on a trip by U.S. President Joe Biden to the Middle East and reports that he is likely to ask the world’s leading oil producer Saudi Arabia to hike oil production in order to bring down high gasoline prices.

“We highly value longstanding cooperation with Saudi Arabia in energy,” the spokeswoman said.

She blamed high oil and gas prices on West’s “blunders” in energy policy as well as sanctions against large energy producers such as Russia, Iran and Venezuela.

President Vladimir Putin warned the West on Friday that continued sanctions against Russia over the conflict in Ukraine risked triggering catastrophic energy price rises for consumers around the world.

  • Reuters