By Irina Slav – May 09, 2022
Members of G7 committed to decreasing their purchases of Russian oil amid the war in Ukraine at a virtual meeting this weekend.
Per an AFP report, the United States, France, Canada, Germany, Italy, Japan, and Britain pledged to stop buying Russian oil, although they did not specify how and when this would happen.
Some G7 members such as Britain, the United States, and Canada have already imposed import bans on Russian oil, but they are quite minor importers of Russian oil, so the bans have not had any material effect on Russia’s revenues from its hydrocarbon industry, which G7 is seeking to stifle with sanction action.
Japan is a very different case, as evidenced by last week’s statement by economy, trade, and industry minister Koichi Hagiuda, who said, as quoted by Reuters, that it would be difficult for Japan to cut oil imports from Russia.
Following the G7 meeting this weekend, Japan’s Prime Minister Fumio Kishida said the country would ban Russian oil imports “in principle”.
“For a country heavily dependent on energy imports, it’s a very difficult decision. But G7 coordination is most important at a time like now,” Kishida said, as quoted by Reuters.
Large European energy importers are also preparing to phase out Russian oil purchases as part of their concerted response to Russia’s invasion of Ukraine. For example, Germany recently boasted that it had substantially reduced its imports of Russian crude and dropped its opposition to an EU-wide oil embargo, to be phased in over six to eight months.
Three Central European EU members have agreed on exemptions and longer terms to reduce their reliance on Russian oil. Bulgaria has threatened to veto the embargo unless it also gets an exemption.
The news of the embargo became the latest driver behind higher oil prices, pushing Brent over $112 per barrel at the time of writing, with West Texas Intermediate at close to $110 per barrel.
By Irina Slav for Oilprice.com
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