Russian Oil Tops G7 Price Cap

Spot prices of Russia’s crude oil this week surpassed the $60-per-barrel threshold of the Group of Seven’s oil price cap scheme, as Moscow and Riyadh tighten supplies.
The G7 introduced its oil price cap mechanism on Dec. 5 to retain Russian flows in the market while also limiting revenue for the Kremlin’s war coffers, CNBC reported.
The European Union was banned from importing Moscow’s crude that same month. Under the G7 scheme, Western shipping and insurance providers can offer services to non-G7 buyers of Russian crude if the crude oil is acquired at a price below $60 per barrel.
Prices for Russia’s main export crude — the heavy-sulfur, “sour” Urals that loads from the Primorsk, Ust-Luga and Novorossiysk ports — this week exceeded that threshold for the first time since the price cap mechanism was implemented.
The Organization of Petroleum Exporting Countries and the International Energy Agency forecast surging demand in the second half of the year.
On supply, some members of the OPEC+ group — comprising OPEC and its allies — are implementing 1.66 million barrels per day of voluntary production cuts until the end of 2024. Crowning this, Saudi Arabia announced an extra unilateral decline of 1 million barrels per day in July and August, while Russia committed to cut exports by an additional 500,000 barrels per day next month.
Lower US inflation has eased some of the macroeconomic concerns weighing on the crude complex over the year.