US, Europe to impose price cap on Russian oil ‘in next few days’

The United States and its European allies have devised a plan to impose a price cap on Russian oil in “the next few days” in an effort to slash Moscow’s oil revenues.

A senior US Treasury Department official told reporters on Tuesday that the US and the European Union (EU) would take steps to implement the cap once the EU members’ consultations in regard to oil price levels are completed.

“We expect the next few days for them to complete their consultations on price setting, and for us as a coalition to move forward… implementing the price cap ahead of December 5,” the official said.

The official added that there was no reason to believe Moscow would retaliate against the new policy, as “it’s not in their interest.”

Treasury officials have claimed that the price cap for Russian oil would still allow Moscow to earn a profit; however, it will limit the Kremlin’s access to excess revenues from inflated prices.

The cap will likely be reviewed on a quarterly or semi-annual basis, due to the need to provide certainty to the marketplace, the official added.

Media reports said in related news last week that oil demand worldwide had risen in September to above pre-COVID levels by nearly 1 million barrels per day (bpd). The Joint Organizations Data Initiative (JODI) released new data on Thursday showing that global oil demand had risen seasonally in September to the second-highest level of this year. In September, global oil demand was at 101 percent of pre-COVID levels, while crude production was at 99 percent of those levels, the data revealed.

Oil demand in the world’s top oil importer, China, rose by 459,000 bpd in September, but it was still 453,000 bpd below levels from last year.

Meanwhile, OilPrice reported that officials were talking about setting the price at which Russia’s crude oil would be capped at $60 per barrel.

The group will meet on Wednesday to try to come to some agreement on prices, it said.

Earlier, OilPrice had revealed that Russian energy might still have several interested buyers in Europe that were buying it through intermediary countries.