G7 cap to halve price of Russian oil – Tokyo

The price cap on Russian oil proposed by the Group of Seven will force Moscow to sell crude to around half its current purchase price, according to Japanese Prime Minister Fumio Kishida.

The mechanism has been designed to ensure that Russian oil “will not and cannot be bought at a higher price” than the established threshold, Kyodo News quoted Kishida as saying during a stump speech in Tokyo on Sunday.

He referred to a joint communique released after a summit of G7 nations in late June. Back then, members of the group said the shipping of Russian crude and petroleum products could be prevented unless the fuel had been purchased at or below a certain price.

The limitation of oil prices is part of an unprecedented suite of sanctions imposed by the West on Russia over its military operation in neighboring Ukraine. Preventing Russian oil from reaching global markets would drastically reduce the country’s export revenue.

“We must show that aggression comes with a heavy price,” Kishida said, adding that Russia’s offensive in Ukraine had sent prices skyrocketing.

The Japanese premier said he had called on other world leaders during the G7 summit in southern Germany to work together in taking measures against rising costs.

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