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Russia has 3 oil moves reportedly in mind to hit back at the G7 price cap: a sales ban, a minimum price and maximum discounts

Oil tanker
Asian countries have been buying more Russian oil.SONGPHOL THESAKIT/Getty Images
  • Russia could strike back at the G7 price cap in three different ways, according to reports.

  • These include a sales ban to participating countries, a price floor and maximum discounts.

  • Russia's Deputy Prime Minister said any retaliatory measure would come into force by year-end.

Russia is weighing its options to counter a price cap on its crude oil imposed by the G7, according to reports.

G7 member countries hit Russia this week with the oil price ceiling in response to Moscow's unprecedented invasion of Ukraine. The cap, set at $60 a barrel on Monday, aims to limit President Vladimir Putin's ability to fund the war, while still keeping as much Russian oil flowing through global markets.

Under the measure, refiners, traders, and financers won't be allowed to handle Russian oil unless it was traded below the set price. It also denies insurance to tankers unless they trade Russian crude at or below the set level.

According to Reuters, Russia is considering to retaliate against the G7 measure by banning oil sales to countries that participate in the price cap, while Bloomberg reported Moscow is looking at setting a minimum price and maximum discounts on its crude barrels.

A minimum price essentially means Russia would set a price floor for its crude, two officials familiar with the matter told Bloomberg. A maximum discount on Russian oil to international benchmarks means producers won't be allowed to sell crude below that level, sources said.

The discount would frequently adapt to the situation in the global energy market, they added.

Per Reuters, Russia's Deputy Prime Minister Alexander Novak said that any measures in response to the price cap will come into effect by the end of the year.

 

Read the original article on Business Insider