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G7 Price Cap on Russian Oil to Give Buyers "Leverage"

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The G7 price cap on Russian oil will give buyers more leverage to get better prices according to US Treasury Official Ben Harris.

  • The plan, agreed upon in principle last month but thin on details, is designed to keep Russian oil volumes flowing and avoid market tightness.
  • The price of the cap – yet to be agreed - will be calculated on a dollar per barrel basis and will be set at a level that will retain an incentive for companies to produce according to Harris.
  • "The intention of the price cap is to preserve trade of Russian oil but at lower prices," Harris said.
  • "Because we want to provide economic incentives for Russia to continue to produce, we're considering the higher cost wells as a data point." he added.
  • "We can have a very successful price cap without a single barrel traded under the price cap. If what we've done is provide leverage for those importers to get the best discount possible, we're perfectly fine with that." he said.
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The G7 price cap on Russian oil will give buyers more leverage to get better prices according to US Treasury Official Ben Harris.

  • The plan, agreed upon in principle last month but thin on details, is designed to keep Russian oil volumes flowing and avoid market tightness.
  • The price of the cap – yet to be agreed - will be calculated on a dollar per barrel basis and will be set at a level that will retain an incentive for companies to produce according to Harris.
  • "The intention of the price cap is to preserve trade of Russian oil but at lower prices," Harris said.
  • "Because we want to provide economic incentives for Russia to continue to produce, we're considering the higher cost wells as a data point." he added.
  • "We can have a very successful price cap without a single barrel traded under the price cap. If what we've done is provide leverage for those importers to get the best discount possible, we're perfectly fine with that." he said.