NewsJapan pushes for tighter cap on Russian oil prices, backed by G7, EU, and Australia

Japan pushes for tighter cap on Russian oil prices, backed by G7, EU, and Australia

The President of Russia, Vladimir Putin
The President of Russia, Vladimir Putin
Images source: © Getty Images | Contributor

2:08 PM EST, February 6, 2024, updated: 4:08 AM EST, March 7, 2024

Before the end of 2022, the G7 countries, the European Union, Australia, Norway, among many other countries, adopted a maximum price cap for Russian oil. This crucial income earner for Putin's regime cannot be purchased for more than 60 dollars per barrel according to the agreement.

The Ministry of Finance in Japan is insisting on the tightening of this price cap, reports, referencing the Japanese publication "Nikkei". Media outlets have reported that this concept has found favor with the G7 nations, as well as the European Union and Australia. The new cap is scheduled to take effect from February 20, 2024.

Russian oil slips through sanctions

As observed recently, millions of fuel barrels, processed from Russian crude oil, continue to be imported into Great Britain, undeterred by the sanctions imposed on the Kremlin due to the Ukraine conflict. This was reported by the BBC.

Consequently, Russian crude oil is refined in third-country facilities, predominantly in India. The output from this refining process is then sold to Great Britain. Although it is not illegal and does not infringe upon Britain's ban on importing Russian oil, the BBC emphasized that it weakens the sanctions with the goal of restraining Russian war resources.

The UK government has refuted any importation of Russian oil since 2022. Government spokespeople have, however, clarified that internationally recognized "rules of origin" establish that, for trading purposes, crude oil refined in another country is classified as originating from the refining country.

The Energy and Clean Air Research Center (CREA) has stated that this "refinery loophole" allows nations like India and China, which have not placed sanctions on Russia, to lawfully import and refine Russian crude oil. These countries can then produce and export petroleum products such as jet fuel and diesel to the UK and the EU.

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