Proposed Russian oil Price cap may Include Refined Products

by Ship & Bunker News Team
Tuesday July 12, 2022

A G7 proposal to impose a price cap on Russian oil should include refined products as well, the head of the International Energy Agency has said.

A price cap is being considered by the group of the world's wealthiest econom‪ies as a means to curb inflationary pressures and limit Russian financial gain as it pursues its military goals in Ukraine.

"My hope is that the proposal, which is important to minimise the effect on the economies around the world, gets buy-in from several countries," IEA executive director Fatih Birol told Reuters in an interview on the sidelines of the Sydney Energy Forum.

The G7 idea is to tie financial services, insurance and the shipping of oil cargoes to a price ceiling. A shipper or an importer could only get these services if they committed to a set maximum price for Russian oil, the report said.

However, with a resolution to the Russian-Ukrainian conflict still far on the horizon, markets have to already adapted and bunker traders Ship & Bunker spoke to about the prospect of a price cap seemed unfazed.

"I don't think this would have much impact on the market as set up deals have already been made between parties," one bunker trader said.

"Contracts can be adapted to deal with such situations," the trader added.

Cargo flows to non-sanctioned countries is another route whereby markets can get access to discounted product. Saudi Arabia is reported to importing fuel oil cargoes at a record rate.

Ship & Bunker News Team
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