Oil pumping jacks, also known as "nodding donkeys", operate in an oilfield near Neftekamsk, in the Republic of Bashkortostan, Russia, on Nov 19, 2020. (ANDREY RUDAKOV / BLOOMBERG)
WASHINGTON – Finance ministers of the Group of Seven countries have agreed to impose a price cap on Russian oil, US Treasury Secretary Janet Yellen said in a statement Friday, without specifying implementation details.
I look forward to working with our G7 allies — as well as new coalition partners — as we move quickly to finalize the implementation of the price cap in the weeks to come.
Janet Yellen, US Treasury Secretary
By committing to finalizing and implementing a price cap, the G7 will significantly reduce Russia's main source of funding for the conflict in Ukraine, while maintaining supplies to global energy markets by keeping Russian oil flowing at lower prices, Yellen said.
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Today's action will help deliver a major blow for Russian finances and will both hinder Russia's ability to continue the fight in Ukraine and hasten the deterioration of the Russian economy, she said.
"I look forward to working with our G7 allies — as well as new coalition partners — as we move quickly to finalize the implementation of the price cap in the weeks to come," said Yellen.
Calling G7's plan completely absurd, Russian Deputy Prime Minister Alexander Novak on Thursday said Russia would not supply oil and petroleum products to those countries that support the price caps, warning the measure could destroy the global oil market.
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Despite Western sanctions, Russia's revenue from oil exports in June increased 40 percent from the average level last year, according to a recent report from the International Energy Agency.