U.S., G7 announce new price caps on Russian petroleum products
The U.S., along with the G7, is slapping two more price caps on Russian refined petroleum products after implementing a cap on Russian oil prices last year.
Officials agreed to set two different price levels for petroleum products.
The first cap will be implemented for "premium-to-crude" petroleum products, including diesel, kerosene, and gasoline, which will be set at $100 per barrel.
The other will be placed on "discount-to-crude" petroleum products, such as fuel oil, which will be set at $45 per barrel.
These price caps go into effect Sunday, Feb. 5, or very soon thereafter.
"The caps we have just set will now serve a critical role in our global coalition’s work to degrade Russia’s ability to prosecute its illegal war," Treasury Secretary Janet Yellen said in a statement.
"Combined with our historic sanctions, we are forcing Putin to choose between funding his brutal war or propping up his struggling economy."
Friday's agreement builds on the price cap on Russian crude oil exports officials set in December and aims to advance limiting Russia’s key source of revenues and trying to promote stable global energy markets.
Yellen said the U.S. sees early progress on the Russian oil price cap, pointing to senior Russian officials who have admitted that the crude oil price cap is cutting into their revenue and has hurt Russia’s fiscal outlook.
"Global energy markets have also remained well-supplied, and public reports indicate that crude oil importers are using the price cap to drive steep bargains on Russian oil imports," said Yellen.
The price cap coalition, which includes the U.S., the G7 and Australia, will undertake a review of the price cap on crude oil in March to ensure that it continues to meet its goals. That review will take into account technical analysis and the outlook for the global economy.
Crude oil prices fell on Friday, with WTI crude oil dropping over 3.5% to $73.19 a barrel. Crude oil has been volatile this year, with WTI rising as high as $82 a barrel late last month.
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