G-7 tries to recruit nations

Two months after agreeing to review price caps on Russian oil sales, the G-7 countries are still trying to win other countries over to their efforts before starting more detailed discussions about the policy’s details, US and European officials said .

“The coalition needs to be broader and that is the diplomatic phase [negotiators] received,” said a European official, requesting anonymity to discuss sensitive considerations.

The world’s major democracies – with the notable exception of India – have banned the import of Russian oil. They are now negotiating a ban on insuring Russian oil and shipping it to other countries unless sales are below a set price.

Russian President Vladimir Putin chairs a session of the State Council Presidium on the development of the national tourism industry in Vladivostok, Russia, September 6, 2022.

Valery Sharifulin | Tass Host Photo Agency | via Reuters

They aim to limit the amount of revenue the Kremlin receives but keep Russian oil on the market to avoid supply disruptions.

The top importers of Russian oil – China, India and Turkey – have not yet said whether they will join the coordinated price cap or negotiate their own side deals with Russia. Their involvement could determine how much influence western nations have in setting prices.

“It is premature to discuss the price before the coalition meets,” a senior Treasury Department official told CNBC.

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Foreign state and financial officials will hold several meetings over the next two months — at the UN General Assembly in New York, International Monetary Fund and World Bank meetings in Washington, and at multilateral summits overseas — to discuss the mechanism. Negotiators expect the group of 20 nations — or 19 excluding Russia — to have reached a decision by their mid-November meeting in Bali, Indonesia.

“It is expected that by then the G-20 will be able to announce their possible participation,” the European official said. Until then, no discussions have taken place among the allies about the specific price at which Russian crude oil, high-value refined products and low-value refined products are allowed to be sold.

“We have ideas of what numbers can be, but they’re just numbers without a strong technical basis,” the European official said.

In recent days, G-7 negotiators have formalized their intention to continue the price cap after announcing it at the conclusion of the recent Alpine summit. Treasury Secretary Janet Yellen suggested that the US does not necessarily need the participation of China or Russia for the policy to have its intended impact.

“We’re already seeing this initiative pay off as countries buy Russian oil at heavily discounted prices,” Yellen told MSNBC after a Sept. 2 meeting with G-7 negotiators. “We have impact.”

A senior White House official said the Biden administration expects the price cap to go into effect by the end of the year.

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