The U.S. Treasury Department on Monday said vessels of Russian petroleum that are loaded before Dec. 5 and unloaded at their destination before Jan. 19, will not be subject to the price cap being planned by Western governments.
The U.S. government, the G7 and the EU plan to impose the price cap, which begins on Dec. 5 as part of sanctions against Russia for its invasion of Ukraine.
The exact price levels of the caps, which will be placed on shipments of Russian crude oil and oil products, are still being worked out. A senior Treasury Department official told reporters in a call that discussions on the price level among G7 countries and Australia are centering on Russian oil production costs and historic prices for Russian Urals oil.
One person familiar with the process said last week the cap will be determined in line with the historical average of $63-$64 a barrel, a level that could form a natural upper limit.
The Treasury official said the department had held more than 100 conversations with industry groups to address their concerns. Allowing petroleum to be unloaded before Jan. 19 gives players in oil markets room to get used to the price cap, the official said. The Treasury published the clarification on when cargoes would be hit with a price cap on its website in a “frequently asked questions” item.