The cost of diesel fuel futures on the London ICE exchange on Friday was $125 per barrel. The G7 countries would like to set an upper price limit for diesel fuel from Russia in the range of $100 to $110 per barrel. This was reported by the agency Bloomberg with reference to the source.
The EU is considering a cap of $100, while the G7 is proposing a range of up to $110. Officials want to avoid price spikes or supply disruptions.
The G100 have made it clear they are comfortable with the European Union setting a ceiling on Russian diesel exports between $110 and $XNUMX a barrel, as the US and its allies try to avoid major market disruptions.
An EU ban on imports of refined petroleum products from Russia is due to take effect on February 5, and the EU is working with G7 countries to introduce a price ceiling for third countries.
The range of $100 to $110 a barrel under consideration today suggests the G7 would favor a higher price — because of risks that setting it too low could cause price volatility or supply disruptions in Europe. The source notes the lack of free capacities on the diesel market, as well as a number of problems related to the maintenance of the existing ones.
On Friday, general diesel futures, which exclude supplies from Russia, were around $125 a barrel, according to data from ICE Futures Europe.
The EU, which will discuss price levels in the coming days, must reach unanimous agreement to set the cap. The mechanism will function by prohibiting EU companies from providing insurance and financial services for the transport of Russian fuel if it is sold above the price ceiling.
The G7 and the EU have already set price caps on Russian crude oil. It is planned to introduce two restrictions for oil refining products: on diesel fuel and on products sold by the Russian Federation at a discount — fuel oil, etc.
The restriction is due to take effect on February 5, but a grace period will be granted to vessels carrying refined products purchased and loaded before that date and discharged by April 1.
Analysts note that the limit of $100 per barrel in the EU is important because it is a key market for Russian diesel exports.
