The G7 price cap is coming to the US Treasury Department to issue guidelines for the transportation of Russian oil

Ahead of the entry into force of the Group of Seven (G7) price limits, including the United States, the United Kingdom, France, Germany, Japan, Italy and Canada, the US Treasury Department issued a new guidance on Tuesday, November 22 local time, clarifying how US service providers can continue to transport Russian oil until December 5 for the sea transportation of Russian oil, and how to comply with the price limit that will take effect
.

A variety of services, such as sea freight and customs brokerage services, are among the services covered by the above guidelines
.
Service providers will not be fined
if crude oil originating in Russia is shipped before 00:01 a.
m.
ET on December 5 and unloaded before 00:01 a.
m.
ET on January 19, the guide said.

The guidelines also describe a "safe harbor" for service providers, who can follow the rules to keep records and follow a process to prove that Russian crude oil covered by the service was purchased at or below the price cap
.

The G7 reached an agreement in September this year to impose price limits on Russian crude oil from December 5 and Russian refined oil products from February 5 next year
.
The European Union and Australia, along with the G7, will set a price cap on seaborne Russian oil from December 5, and if the cap is exceeded, companies will be prohibited from providing shipping, insurance, brokerage and financing services
needed to transport Russian oil.

The above-mentioned G7 and other countries participating in the price limit alliance has not yet decided to set a specific price cap
on Russian oil.
According to guidance released by the U.
S.
Treasury Department on Tuesday, the price cap will be set
after the Limit Alliance conducts "technical maneuvers.
"

Wall Street News mentioned in last week's article that previous news generally pointed to the upper limit of crude oil prices from December 5 to 40 to 60 US dollars / barrel, basically equal to the cost of Russian oil production before the outbreak of the Russian-Ukrainian conflict, but many people familiar with the matter said it may be higher than this level
.

U.
S.
Treasury officials said on Tuesday that the Treasury Department expects other cap-agreement countries to issue similar guidance
in the coming days to comply with the cap-based policy.

"We will take these steps to make it as easy as possible for market participants to implement the price cap policy from December 5, which is consistent with the goal of the price limit alliance to allow Russians to keep oil flowing (flowing) abroad while reducing the Russian government's revenue
.
"

Treasury officials say they have found signs that Russian oil products that had flowed into the United States and Europe have changed their course, and that Europe and the United States are no longer markets
for those products.
One of the officials estimated that the last shipment of Russian oil to Europe would be less than 900,000 barrels
.

The International Energy Agency's monthly report released last week estimated that the EU's ban on seaborne Russian oil, which came into effect in December, will reduce Russia's oil production by 1.
4 million b/d
next year.

According to Xinhua News Agency, on Monday, November 21, local time, Russian Deputy Prime Minister Novak in charge of energy work said that Russia will not supply oil and petroleum products to countries that impose price limits on Russian oil, and will readjust the direction of exports or reduce oil production
.

Novak warned that the imposition of a price cap on energy and the "politicization of energy" will only lead to supply shortages, an "unprecedented intervention" in the principles of market operation, and will inevitably lead to a decline
in investment in the industry as a whole.