The coalition of nations trying to put a ceiling on the price of Russian oil, which includes the G7, the European Union and Australia, will announce a proposed limit “in the coming days”, a US Treasury official said, according to AFP.

“In the coming days, our coalition will announce the level of prices for oil and gas” extracted by Russia, “we are working with our partners to finally determine this,” the official explained during a telephone press conference.

The goal is to reach the maximum price for Russian hydrocarbons that can be set before the entry into force of new European sanctions, scheduled for December 5.

The new package of sanctions includes a ban on insurers and reinsurers covering the transport of Russian oil, while European operators will be exempted if oil is sold at or below a pre-set limit.

“We are going step by step to allow the market to integrate the implementation of the restriction as easily as possible,” said the same source.

However, questions remain regarding the mechanism for setting the maximum price for Russian oil and how the limit will be updated depending on changes in market prices.

“Our aim is to update it regularly and we hope to do it every quarter or every semester as we want to ensure visibility in the market,” the official added.

Limiting the price of oil sold by Russia should reduce its financial resources and, therefore, its ability to continue the war in Ukraine, as well as limit the rise in energy prices. However, this price must remain higher than production to encourage Russia to keep selling oil rather than cutting off supplies.

The Kremlin has warned that Russia will no longer supply oil to countries that have accepted the limit.

According to the Treasury Department, this decision “would not be in their best interests” because “any action they take will affect customers like India and China that they want to keep.” Therefore, we believe that they will continue to supply oil to them and other customers.