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07 Dec 2022

Price cap on Russian oil agreed: What does this mean?

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In a move to further stifle Russia's ability to finance their invasion of Ukraine, the G7 nations and Australia (the "Price Cap Coalition") have agreed a price cap of US$60 per barrel on exports of Russian oil. The Price Cap Coalition have collectively banned the import of Russian oil and oil products into their markets and agreed to a comprehensive prohibition of services which enable maritime transportation of Russian origin crude oil and petroleum products globally. The Price Cap Coalition have adopted an exception to the services ban, which will permit Russian oil to continue to be traded to and between third countries, provided that it is purchased at or below a price cap, initially set at US$60 per barrel (the "Price Cap"). The Price Cap will be reviewed every two months.

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