A US ally gets to buy Russian oil above ceiling price

The US has lobbied European allies to support a $60/barrel cap on purchases of Russian crude, but Japan , one of America's closest allies in Asia, is currently buying oil at prices well above that.

The G7 (the world's seven largest developed economies ), the European Union (EU) and Australia have agreed to a price ceiling of $60 per barrel for Russian seaborne crude oil to reduce Russia's income from oil sales and prevent global oil prices from spiking.

The price ceiling allows non-EU countries to continue importing Russian crude, but prohibits shipping, insurance and reinsurance companies from handling Russian crude shipments globally unless they are sold at a price below the ceiling.

Even if oil-buying companies are not affiliated with the US, they still need to use insurance and other services from companies based in the US or one of its allies.

Total value of LNG imported from Russia by Japan from 2018-2022 (Unit: billion Yen). Source: Ministry of Finance of Japan

The countries have made an exception for crude oil that Japan buys from the Sakhalin-2 project in Russia's Far East until September 30, as the Asian nation has no fossil fuel resources of its own and must rely on Russia.

While many countries are reducing their dependence on Russian energy supplies, Japan has increased its purchases of Russian natural gas over the past year. The European country accounts for nearly a tenth of Japan’s natural gas imports, most of which comes from Sakhalin-2. Japan’s gas purchases from the region in 2022 are 4.6% higher than the previous year.

In the first two months of this year, Japan bought about 748,000 barrels of Russian oil worth 6.9 billion yen, according to official trade statistics. At current exchange rates, that amounts to $52 million, or nearly $70 a barrel .

Nguyen Tuyet (According to WSJ, Fox Business)

Source: https://www.nguoiduatin.vn/mot-dong-minh-cua-my-duoc-mua-dau-nga-tren-muc-gia-tran-a601121.html