Finance ministers from the West’s seven most powerful economies are expected to reaffirm plans on Friday to impose a price ceiling on Russian oil aimed at curtailing revenue from Moscow’s war in Ukraine, as well as maintaining oil supplies to avoid rising prices, G7 officials said.

Ministers from the wealthiest industrialized democracies are due to meet virtually and are expected to issue a communiqué outlining their plans.

“A deal is possible,” a G7 European spokesman said, adding that it was not clear how many details would be disclosed, such as the price ceiling level per barrel above which the respective countries would refuse to insure and finance Russian oil and Russian oil. cargoes of crude oil and petroleum products.

UK Treasury Secretary Nadeem Zahavi said Thursday in Washington that he is optimistic that G7 finance ministers “will have a statement that means we can move forward towards that goal.”

“We want to move this oil price cap forward,” he said at a think tank event in Washington, a day after discussing the cap with US Treasury Secretary Janet Yellen.

The International Energy Agency said last month that despite falling oil exports from Russia, its oil export revenues rose $700 million in June from May as prices rose due to the war in Ukraine.

In June, Western leaders agreed to consider capping the amount refiners and traders can pay for Russian oil. Moscow claims the move will not be respected and could be prevented by shipping oil to states that do not adhere to price ceilings.

White House press secretary Karine Jean-Pierre declined to comment on the G7’s price cap plans, saying she didn’t want to “prejudge this meeting.”

Broader Support

Some G7 officials have said the cap needs wider support and wonder if it can succeed without the involvement of big oil consumers China and India, who are unlikely to approve the plan.

But other G7 officials said China and India have expressed interest in buying Russian oil at a price even lower than the set price.

Any price cap would depend largely on the denial of London-brokered shipping insurance, which covers about 95% of the world’s tanker fleet, and the financing of cargo at a price above the cap. But analysts say alternatives can be found to get around the restriction, and market forces could make it ineffective.

Another G7 spokesman said the bloc had “a desire to show that there is momentum in this” ahead of the European Union’s planned Dec. 5 imposition of a regional embargo on Russian oil.

The US Treasury Department has expressed concern that the EU embargo could spark a scramble for alternative supplies, raising world oil prices to $140 a barrel, and is pushing for a price cap from May to keep Russian oil flowing.

Russian oil prices rose ahead of the EU embargo, with Urals oil trading at a discount of $18 to $25 per barrel compared to Brent crude from $30 to $40 earlier this year.

Source: Reuters.