Russian oil price cap is coming within weeks, US Treasury official says

The Group-of-Seven industrialized economies are within weeks of announcing a formal cap on the price of Russian oil, according to a US Treasury official.

The step will be announced “substantially before Dec. 5,” Ben Harris, US Treasury’s assistant secretary for economic policy, said on the sidelines of the Argus European Crude Conference in Geneva on Tuesday. That’s the date when aggressive European Union sanctions on Russian oil exports are due to enter into force.

The cap is actually designed keep Russian oil flowing, not curb it, because it would give participating buyers access to key European services -- especially tanker insurance that the bloc’s measures will otherwise prohibit. The Treasury has long argued that the west could deprive the Kremlin of revenues for its war in Ukraine, while avoiding a spike in oil prices, if those services aren’t removed and a price cap gets imposed.

It’s not clear whether non-G-7 nations will sign up to a cap, and Russian president Vladimir Putin has threatened to withhold crude supply from any country that commits to an uppper price limit.