G-7 looks to recruit more countries on Russian oil cap before negotiating details, officials say

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  • According to US and European officials, the G-7 countries are still trying to recruit more countries to join the Russian oil price cap before they have more detailed discussions about the specifics of the policy.
  • The countries aim to limit the amount of revenue the Kremlin receives, but keep Russian oil on the market to avoid supply disruptions.
  • A senior White House official said the Biden administration expects the price cap to go into effect by the end of the year.

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According to US and European officials, two months after agreeing to explore a price cap on Russian oil sales, G-7 countries are more likely to join their efforts before having more detailed discussions about the specifics of the policy. Trying to recruit countries.

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“The alliance has to be comprehensive, and this is the diplomatic phase [negotiators] entering,” said a European official, requesting anonymity to discuss the sensitive deliberations.

The world’s major democracies – with the notable exception of India – have banned imports of Russian oil. They are now negotiating a ban on insurance and shipping of Russian oil to other countries unless sales are below a set price.

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Their goal is to limit the amount of revenue the Kremlin receives, but to keep Russian oil on the market to avoid supply disruptions.

Major importers of Russian oil – China, India and Turkey – have not yet said whether they will join a coordinated price cap or negotiate their own side deals with Russia. Their participation may determine how much leverage the Westerners have to set prices.

“It is too early to start discussing price before the coalition comes together,” a senior Treasury official told CNBC.

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Over the next two months there will be several gatherings of foreign leaders and financial officials – at the UN General Assembly in New York, meetings of the International Monetary Fund and World Bank in Washington, and multilateral summits abroad – to discuss the mechanism. Negotiators expect the group of 20 countries – or, 19 excluding Russia – to have decided by the time they gather in Bali, Indonesia, in mid-November.

“It will be expected that G-20 countries will be able to communicate their potential participation by that time,” the European official said. Until then, there has been no discussion of a specific price to allow the sale of Russian crude oil, high-value refined products and low-value refined products among allied countries.

“We have an idea of ​​what the figures might be, but these are just figures without a strong technical basis,” the European official said.

In recent days, G-7 negotiators formalized their intention to push the price range, after announcing it at the conclusion of the recent Alpine summit. Treasury Secretary Janet Yellen suggested that the US does not necessarily require China or Russia to participate for the policy to have its intended effect.

“We are already taking advantage of this initiative because countries that are buying Russian oil at very discounted prices,” Yellen said on MSNBC after a meeting with G-7 negotiators on September 2. “We are making an impact.”

A senior White House official said the Biden administration expects the price cap to go into effect by the end of the year.

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