October 1, 2022

  • There is an urgent need to cap Russian oil prices as Moscow escalates its war, a top adviser to the Ukrainian president told Reuters.
  • “We have to cut off the regime’s blood money that they use to kill our people,” said Oleg Ustenko, Volodymyr Zelensky’s chief economic adviser.
  • The Group of Seven is working to establish a price ceiling to coincide with the EU oil embargo planned for December.

The need to impose a cap on Russian oil prices is becoming more urgent as Moscow plans to deploy more troops to fight in Ukraine, Ukrainian President Volodymyr Zelenskyy’s senior economic adviser has said. Reuters in a report published on Wednesday.

“Russia is fighting the last fight, so we need to be even more united, including the sanctions policy,” said Oleg Ustenko, Zelensky’s chief economic adviser. “We must cut off the regime’s blood money that it uses to kill our people.”

Russian President Vladimir Putin announced on Wednesday Russia would mobilize more troops for her war in Ukraine. Moscow, whose military suffered numerous setbacks during the invasion, plans to call up up to 300,000 reservists. Putin also alluded to Russia’s nuclear arsenal, saying the country will use all its resources “to defend our people.”

The Group of seven industrialized democracies earlier this month they agreed to work on capping the price of Russian oil to reduce Moscow’s revenues. It has not yet been announced what the limit will be.

“We are moving quite quickly with the price cap mechanism, the talks are almost finished,” Ustenko told Reuters.

The G7 aims to introduce a price cap by December 5, when the European Union will introduce a partial ban on Russian oil imports. The idea is to ban services such as insurance to shippers who carry Russian oil above the price ceiling.

India and China have emerged as the largest importers of Russian crude oil since the war began in late February. The two countries bought $9 billion of additional Russian oil in the second quarter compared to the first quarter, according to the Financial Times.

The price of Russia’s Urals crude was trading at $71.05 a barrel on Wednesday, below Brent, the international standard, at $87.74.

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