US to issue more guidance on Russian oil price cap in coming days, Auto News, ET Auto
The US government plans to issue guidance in coming days on a Russian oil price cap taking effect on Dec. 5 and is ready for some “hiccups” in its implementation, a State Department official said on Thursday.
Jim Mullinax, director of the Office of Sanctions Policy and Implementation, told a panel hosted by Thomson Reuters that the government was in close touch with industry and international partners about the oil price cap, and was approaching it with a “spirit of flexibility.”
The United States, its Group of Seven allies and Australia plan to cap prices of Russian sea-borne oil shipments effective Dec. 5, with a second cap on oil products kicking in Feb. 5.
The unprecedented price cap aims to block Russia from profiting from a jump in oil prices since its Feb. 24 invasion of Ukraine while ensuring that Russian oil continues flowing to global markets after a European Union ban on Russian oil imports takes effect next month.
It was not immediately clear if the new guidance would specify the cap price. The coalition agreed this month to set a fixed price for Russian oil, rather than a floating rate.
The plan calls for participating countries to deny Western-dominated oil transport services like insurance, finance, brokering and navigation to oil cargoes priced above the cap.
“I’m hoping that it’s been telegraphed well, that we’ve been relatively transparent,” Mullinax said.
“We’ve taken a lot of feedback from industry about how to implement this…. There’s probably going to be some hiccups in the early frame,” he said.
Michael Dawson, a partner with the WilmerHale law firm, said the United States, Britain and the European Union had prepared well.
“They’re open and flexible to address some of the problems that arise – and there will be problems,” he told the same panel.