Russia

Sakhalin-2 to be exempted from Russian oil price cap

REUTERS/Sergei Karpukhin (RUSSIA)/File Photo
A general view of the Sakhalin-2 project’s liquefaction gas plant in Prigorodnoye, about 70 km (44 miles) south of Yuzhno-Sakhalinsk October 13, 2006.

Jiji Press

16:57 JST, November 23, 2022

WASHINGTON (Jiji Press) — Oil that Japanese companies receive from the Sakhalin-2 project will be exempted from a proposed price cap on Russian oil until 12:01 a.m. on Sept. 30, 2023, EDT, the U.S. Treasury Department said Tuesday.

Japanese trading houses Mitsui & Co. and Mitsubishi Corp. have stakes in the Sakhalin-2 project in Russia’s Far East, a key source of stable oil supplies to Japan.

The price cap has been discussed to limit Russia’s revenue from oil exports as part of additional sanctions on Moscow over its invasion of Ukraine.

Firms will be banned from insuring Russian oil shipments sold below the cap, effective on Dec. 5.

The Group of Seven wealthy democracies, the European Union and Australia aim to reach an agreement on the price cap level as early as Wednesday. The G-7 countries support setting the cap at around $60 per barrel.

China and India, major buyers of Russian oil, will not join the initiative. Russian Deputy Prime Minister Alexander Novak has said Russia will not ship oil to countries imposing the price cap. Russian oil shipped to some EU countries, including Bulgaria and Croatia, will also be exempted from the cap.