Monday, the g7 group of nations and their allies, including canada, france, germany, italy, japan, the uk and the united states, agreed to cap the price of russian oil at $60 a barrel. this agreement was made in response to russia’s invasion of ukraine. opec+, an organization of 23 oil-exporting countries, including russia, also decided to stick to its policy to reduce production, citing slower global growth and higher interest rates.
traders responded positively to the strong us jobs data and the prospect of easing covid restrictions in some chinese cities. the g7 and australia had agreed to the $60 cap on russian oil last week, and it is expected to be implemented soon. us treasury secretary janet yellen announced the price cap, stating that it would constrain the funds available to russian president vladimir putin for his ‘brutal invasion’ of ukraine.
the eu will begin to enforce a ban on crude oil imported by sea from russia on monday. russia is attempting to mitigate the blow by selling its oil to other countries, with india and china being the largest single buyers. opec+’s decision is seen as an implicit support to the oil market. stephen innes, managing partner at spi asset management, has commented on the optimism, but warned against “chasing oil higher with china’s reopening”.