The Group of Seven (G7) countries and Australia announced on Friday that they had agreed to a $60 per barrel price cap on Russian seaborne crude oil after European Union members overcame Poland’s opposition and reached a political agreement earlier in the day.
The EU agreed on the price after Poland backed down, opening the path for formal approval over the weekend.
The G7 and Australia announced in a statement that the price cap would go into force on December 5 or shortly thereafter.
The nations stated that any price increase would include some type of grandfathering to allow conforming transactions completed prior to the change.
‘The Price Cap Coalition may also explore additional action to ensure the price cap’s efficacy,’ the statement said. There were no immediate specifics on what additional actions could be taken.
The G7-proposed price cap attempts to reduce Russia’s income from oil sales while averting a jump in global oil prices once an EU ban on Russian petroleum takes effect on December 5.