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According to Amos Hochstein, President Joe Biden’s special presidential coordinator, the G7 oil price cap scheme, which is intended to limit Russia’s oil export earnings, “has worked very well so far. ”.
“There is no doubt that there has been a price cap so far as oil prices have fallen. We still have a long way to go to achieve interest, limiting the value oil brings to Putin while curbing economic growth,” he told CNBC’s Hadley Gamble in Abu Dhabi on Friday.
The Price Cap Initiative was introduced on 5 December when the EU suspended imports of Russian crude oil. Under this pricing structure, non-G7 buyers using Western services such as shipping, insurance and financing should not exceed $60 per barrel for seaborne Russian crude.
EU countries will no longer have access to Russian offshore oil products after February 5th.
President Vladimir Putin announced last month that Russia would suspend supplies of crude oil and petroleum products to countries that comply with the cap for five months, starting February 1. The retaliation move will be followed by another ban related to refined petroleum products. .
Hochstein said the plan is still in its infancy, but “the fact that the discount on Russian oil has increased is a good thing and I hope it continues. Let’s see where it leads us.” said.
He did not specify how much the US believed the price cap initiative was hurting Russia. million euros ($172 million).
The plan, while outlined by the G-7 and its ally Australia, was met with significant skepticism from some analysts.
Former U.S. Treasury Secretary Steve Mnuchin said the idea was “not only unfeasible, but I think it’s the dumbest idea I’ve ever heard.”
“I’m glad everyone was skeptical if the price cap would work. If it wasn’t done before it was possible, I think people tend to think it’s impossible. I think we’ve come together. It’s part of the G7 unity. So far so good,” Hochstein said.
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