Most G7 members ready to lower Russian oil price cap without US
Most countries in the Group of Seven nations are prepared to go it alone and lower the G7 price cap on Russian oil even if U.S. President Donald Trump decides to opt out, four sources familiar with the matter said.
G7 country leaders are due to meet on June 15-17 in Canada where they will discuss the price cap first agreed in late 2022. The cap was designed to allow Russian oil to be sold to third countries using Western insurance services provided the price was no more than $60 a barrel.
The European Union and Britain have been pushing to lower the price for weeks after a fall in global oil prices made the current $60 cap nearly irrelevant.
The sources, who declined to be named, said the EU and Britain are ready to lead the charge and go it alone, backed by the other European G7 countries and Canada.
They said it is still unclear what the U.S. will decide, though the Europeans are pushing for a united decision at the meeting. Japan's position also remains uncertain, they said.
"There is a push among European countries to reduce the oil price cap to $45 from $60. There are positive signals from Canada, Britain and possibly the Japanese. We will use the G7 to try to get the U.S. on board," one of the sources said.
The White House had no immediate comment. During the G7 finance ministers meeting in the Canadian Rockies last month, U.S. Treasury Secretary Scott Bessent remained unconvinced there was a need to lower the cap, according to sources.
However some U.S. Senators may endorse the idea, including Lindsay Graham, who in recent weeks told reporters he supports lowering the cap. Graham is pushing a hard-hitting new set of Russia sanctions that could impose steep tariffs on buyers of Russian oil.
The EU has proposed lowering the price to $45 a barrel in its latest 18th package of sanctions. The package must have unanimity from member states in order for it to be adopted, which could take several weeks.
Russia's largest export grade, Urals, trades at around a $10 a barrel discount to the Dated Brent benchmark out of Baltic ports. Brent futures have been trading below $70 a barrel since early April.
Sources said Washington's buy-in was not essential to lower the cap owing to Britain's dominance in global shipping insurance, and the EU's influence on the Western rules-abiding tanker fleet.
The U.S., however, does matter when it comes to dollar-denominated payments for oil and its banking system.
The EU and its Western allies have been progressively cracking down on Russia's shadow fleet of tankers and related actors, which work to circumvent the cap.
The pressure has started to hurt Moscow's revenues and Western allies hope this will push more of the oil trade back under the cap. Russia's state-owned oil producer Rosneft reported a 14.4% slump in profits last year.
(Reporting by Julia Payne and John Irish; Additional reporting by Jarrett Renshaw in Washington; Editing by Jan Harvey)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
9 minutes ago
- Zawya
UK regulator gives thumbs down to household wealth statistics
Britain's statistics regulator ruled on Friday that official data on how rich British households are can no longer be treated as reliable, in another blow to the Office for National Statistics. The suspension of accredited status for the data by the Office for Statistics Regulation comes as the ONS is under investigation by the government over long-running problems with labour market data and follows a significant error in April's inflation data and the suspension of producer price figures. "Declining response rates and a lack of investment have significantly impacted the quality of the survey data, which measures the financial wellbeing of households across Great Britain," the regulator said. The most recent version of the wealth data, published in January, stated that the median British household had wealth of 293,700 pounds ($397,552), with the top 10% of households being worth at least 1.2 million pounds and the bottom 10% under 16,500 pounds. The regulator said the survey, which began in 2006, had provided "crucial economic data on assets, savings, debt and retirement planning that informs state pension levels, academic research, and both monetary and fiscal policy development." The regulator said it had given the ONS instructions on how to improve the data and expected a progress report in September. Declining response rates lie at the heart of the problems with the ONS' Labour Force Survey - used to calculate the unemployment rate and inactivity in the labour force, key data points for the government and the Bank of England. The BoE and the regulator have said the fall in responses to the often lengthy ONS surveys appeared sharper than in other countries which collect similar data. ($1 = 0.7388 pounds) (Reporting by David Milliken; editing by William James)
Zawya
9 minutes ago
- Zawya
EU trade surplus with US grows in April despite tariffs
The European Union's goods trade surplus with the United States expanded in April even after U.S. tariffs, data released on Friday showed, while the bloc's exports to China dropped for a ninth consecutive month. The EU's surplus in goods trade as a whole declined to 7.4 billion euros ($8.5 billion) from 12.7 billion euros in April 2024, data from EU statistics agency Eurostat showed. The EU goods surplus with the United States increased, as it has done every month since January 2024. Both exports to and imports from the United States increased for a fourth consecutive month in April, although the growth was lower than in previous months. U.S. President Donald Trump has announced wideranging tariffs on trade partners, and wants to reduce the U.S. goods trade deficit with the EU. In March, EU exports to the U.S. rose by 59.5%, implying U.S. importers were building stocks of EU and other goods ahead of tariff increases. European Union exporters faced 25% tariffs on steel and aluminium from March 11, on cars from April 3 and on car parts from May 3. Washington doubled the rate on metals to 50% on June 4. It also imposed so-called "reciprocal" tariffs on most EU goods on April 5, initially at 20%, but almost immediately cut to 10% until July 8. The bloc's surpluses with Britain, Switzerland and Mexico fell, while its deficits with China, Norway and South Korea widened in April. EU exports of machinery and vehicles to the rest of the world fell by 4.3%. There were also declines of its exports of raw materials and energy products, while food and drink and chemicals exports were higher than in April 2024. ($1 = 0.8681 euros) (Reporting by Philip Blenkinsop; Editing by Toby Chopra)
Zawya
9 minutes ago
- Zawya
India moves to conserve its rare earths, seeks halt to Japan exports, sources say
India has asked state-run miner IREL to suspend a 13-year-old agreement on rare earth exports to Japan and to safeguard supplies for domestic needs, two sources familiar with the matter told Reuters, aiming to reduce India's dependence on China. IREL also wants to develop India's capacity for rare earth processing, which is dominated globally by China and has become a weapon in escalating trade wars. China has curbed its rare earth materials exports since April, pressuring automakers and high-tech manufacturers worldwide. In a recent meeting with auto and other industry executives, Indian Commerce Minister Piyush Goyal asked IREL to stop its exports of rare earths, mainly neodymium, a key material used in magnets for electric vehicle motors, one of the sources said. The Commerce Ministry, IREL and the Department of Atomic Energy, which oversees IREL, did not immediately respond to requests for comment. The sources declined to be identified because of the sensitivity of the matter. Under a 2012 government agreement, IREL supplies rare earths to Toyotsu Rare Earths India, a unit of Japanese trading house Toyota Tsusho, which processes them for export to Japan where they are used to make magnets. In 2024, Toyotsu shipped more than 1,000 metric tons of rare earth materials to Japan, commercially available customs data showed. That is one-third of the 2,900 tons mined by IREL, although Japan relies mainly on China for its rare earths supply. Toyota Tsusho and Toyotsu did not immediately respond to requests for comment. IREL has been exporting rare earths due to a lack of domestic processing capacity, but following the recent disruptions to supplies of Chinese material it wants to keep its rare earths at home and expand domestic mining and processing, a second source said, adding that IREL is awaiting statutory clearances at four mines. However, India may not immediately be able to stop supplies to Japan because they fall under a bilateral government agreement, the person said. IREL wants this to be "amicably decided and negotiated because Japan is a friendly nation", the person added. Japan's Trade Ministry said in a statement to Reuters: "We would like to refrain from answering questions about bilateral exchanges in general, not just about this matter." EXPANSION PLANS China's recent export controls on rare earth materials have rocked the global auto industry, which has warned of supply chain disruptions and production halts. China also weaponised its supplies in 2010, when it briefly stopped shipments to Japan. That prompted the Japanese to turn to India for rare earths. India has the world's fifth-largest rare earth reserves, at 6.9 million metric tons, but there is no domestic magnet production. India relies on imported magnets, mainly from China. In the fiscal year to March 2025, India imported 53,748 metric tons of rare earth magnets, government data showed. These are used in automobiles, wind turbines, medical devices and other manufactured goods. Rare earth mining is restricted to IREL, which supplies India's Atomic Energy Department with materials for nuclear power projects and defence-related applications. India lacks wide-scale technology and infrastructure to mine rare earths, and the development of any commercially viable domestic supply chain is years away, analysts said. IREL has a rare earths extraction plant in the eastern Indian state of Odisha and a refining unit in Kerala, in southern India. The miner, founded in 1950, plans to produce 450 metric tons of extracted neodymium in the fiscal year to March 2026 with a plan to double that by 2030, the second person said. It is also looking for a corporate partner for the production of rare earth magnets for the auto and pharmaceutical industries, the person said. India is firming up plans for incentives to companies to set up rare earth processing and magnet production facilities to meet local demand, people familiar with the matter told Reuters earlier this month. (Reporting by Neha Arora and Aditi Shah in New Delhi; Additional reporting by Jekaterina Golubkova and Maki Shiraki in Tokyo; Editing by Edmund Klamann)
