G7 countries intend to develop two price caps for Russian oil products to account for those sold at higher prices than crude oil, as well as those sold at a discount, reports Bloomberg..

As part of efforts to impose sanctions on Russia for its invasion of Ukraine, the European Union intends to ban the import of Russian oil products on February 5 and impose cap prices on exports to third countries, which, in particular, will affect diesel fuel, naphtha and heating oil. The exact mechanisms and price levels are still being discussed between the G7 countries and the EU..

The ban on petroleum products follows a European ban on imports of Russian crude oil introduced on Dec. 5, along with a price cap mechanism that allows European companies to provide financing and insurance for crude oil exports from Russia at a price no higher than $60 per barrel..

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This system, aimed at limiting Russia's revenues and preventing oil price spikes, has so far succeeded in doing both, said a G7 spokesman who spoke to reporters on condition of anonymity.. According to Argus Media, on Friday in the port of Primorsk on the Baltic Sea, Russian Urals oil, which is the main export product, cost $37.80 per barrel.. That's less than half the price of Brent oil futures on the same day..

A ban on the sale of petroleum products is in some ways more difficult to design and implement.. Diesel and kerosene have historically sold at higher prices than crude oil, while heating oil has sold at a discount, the official said.. In addition, prices have been extremely volatile over the past year..

Some European officials are worried about a shortage of diesel supplies this year, but a G7 official said the market needs to be flexible enough to adapt..

For example, Russian diesel currently sold to Europe is likely to find buyers in Latin America and Africa.. At the same time, Europe is likely to be able to buy diesel from the Middle East and the US, which currently sells more to Latin America and Africa.. The official, who called it a reshuffle in Atlantic trade, said it could drive up shipping costs as some shipments travel longer distances..

It is not yet clear how Russia will react to the introduction of restrictions on petroleum products. Moscow strongly objected to crude oil price cuts. Russia continues to sell oil, but the Energy Department said it is introducing new monitoring rules to help it limit possible price discounts that may arise..

In mid-January, the EU intends to revise the price ceiling for crude oil, and some countries want to reduce it by 5%. A G7 official said the market has already helped push prices down, suggesting a formal bureaucratic change is not necessary.. The official noted that China and India were able to negotiate with Russia on lower oil prices after the imposition of restrictions.

The EU plans to discuss with the countries of the Big Seven (G7) the tenth package of sanctions against the Russian Federation. This was announced on Monday, January 9, by the Permanent Representative of Sweden to the EU Lars Danielsson. Sweden took over the presidency of the Council of the European Union on January 1.