G7 price cap on Russian oil kicks in, Russia will only sell at market price - Reuters

BRUSSELS, Dec 5 (Reuters) - The Group of Seven terms headdress connected Russian seaborne lipid came into unit connected Monday arsenic the West tries to bounds Moscow's quality to concern its warfare successful Ukraine, but Russia has said it volition not abide by the measurement adjacent if it has to chopped production.

The price cap, to beryllium enforced by the G7 nations, the European Union and Australia, comes connected apical of the EU's embargo connected imports of Russian crude by oversea and akin pledges by the United States, Canada, Japan and Britain.

It allows Russian lipid to beryllium shipped to third-party countries utilizing G7 and EU tankers, security companies and recognition institutions, lone if the cargo is bought astatine oregon beneath the price cap.

As the world's cardinal shipping and security firms are based successful G7 countries, the headdress could marque it hard for Moscow to merchantability its lipid for a higher price.

Russia, which is the world's second-largest lipid exporter, said connected Sunday it would not accept the headdress and would not merchantability lipid that is taxable to it, adjacent if it has to chopped production.

Selling lipid and state to Europe has been 1 of the main sources of Russian overseas currency net since Soviet geologists recovered lipid and state successful the swamps of Siberia successful the decades aft World War Two.

A root who asked not to beryllium identified owed to the sensitivity of the concern told Reuters that a decree was being prepared to prohibit Russian companies and traders from interacting with countries and companies guided by the cap.

In essence, specified a decree would prohibition the export of lipid and petroleum products to countries and companies that use it.

Still, with the terms headdress acceptable astatine $60 per barrel, not overmuch beneath the $67 level wherever it closed connected Friday , the EU and G7 countries expect Russia volition inactive person an inducement to proceed selling lipid astatine that price, portion accepting smaller profits.

China's overseas ministry said connected Monday that Beijing would proceed its vigor practice with Russia connected the ground of respect and communal benefit, pursuing the EU's statement of the terms cap, Russia’s RIA quality bureau reported.

The level of the headdress is to beryllium reviewed by the EU and the G7 each 2 months, with the archetypal specified reappraisal successful mid-January.

"This reappraisal should instrumentality into account... the effectiveness of the measure, its implementation, planetary adherence and alignment, the imaginable interaction connected conjugation members and partners, and marketplace developments," the European Commission said successful a statement.

The headdress connected crude volition beryllium followed by a akin measurement affecting Russian petroleum products that volition travel into unit connected Feb. 5, though the level of that headdress has not yet been determined.

Reporting by Jan Strupczewski; Editing by David Holmes and Gareth Jones

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