G7 keeps Russian oil price threshold unchanged

The G7 states decided not to change the upper price limit for seaborne Russian oil for the second month in a row, which will remain at the level of $60 per barrel, Reuters reports with reference to an official representative of the price coalition.

The decision was unaffected by the fact that benchmark oil prices rose for a fourth straight week, with European Brent and US crude futures trading above $80 a barrel on Monday.

According to the interlocutor of the agency, Russian oil is sold at a discount of about $30 to Brent — that is, below the price threshold.

The coalition believes that the current level of price restrictions on Russian oil works both to limit Russian revenues and to preserve the stability of the energy market.

In March, Russia exported 8.1 million barrels of oil per day — the most since March 2020. As a result, Russia's revenues increased by $1 billion compared to February 2023, reaching $12.7 billion. But this is still 43% less than in March 2022, before sanctions and the price cap, the International Energy Agency said on Friday.

The upper price limit for Russian oil and oil products was set by the coalition, which includes the G7, the European Union and several other countries, including Australia.

The restriction mechanism is implemented in the form of a ban on the provision of technical assistance, brokerage or financial services, including insurance related to the sea transportation of Russian oil and oil products to third countries, if they are purchased at a price higher than the established threshold.

Restrictions on seaborne Russian oil and oil products are set at the following levels:

→ oil — $60 per barrel (from December 5, 2022);
→ diesel and other related petroleum products — $100 per barrel (from February 5, 2023);
→ fuel oil and other related oil products — $45 per barrel (from February 5, 2023).

The coalition members agreed to regularly revise the limit once a month so that it was 5% lower than the average market price for Russian oil and oil products. The first review of the upper limit of Russian oil prices was supposed to take place in February, but it was postponed to March 2023.

Then, as now, the G7 decided that there was no reason to change the restrictions yet.