G7's Proposed Price Cap May Make Russian Oil Twice as Cheap, Japanese PM Says

MOSCOW (Sputnik) - The price ceiling for Russian oil may be established at the half of its current value, with a mechanism to be set up to discourage the purchase of Russia oil at the cost higher than an introduced limitation, Japanese Prime Minister Fumio Kishida said on Sunday.

While delivering a speech in Tokyo as part of the election campaign for the upper house of parliament, Kishida recalled a joint communique issued after the G7 summit late June, which had initially proposed introduction of the price cap for Russian oil. An upper limit should be set at the approximately half of the current prices, with a control mechanism to be established so that Russian oil "will not and cannot be bought at a higher price," Kishida was cited as saying by Japanese Kyodo news agency.

"We are facing a grave situation in which the order of peace is being shaken. We must show that aggression comes with a heavy price," Kishida added.

The communique stated that the oil price cap scheme could be implemented through the options such as allowing Russian seaborne crude oil and petroleum products to be shipped worldwide only if they are purchased at or below an agreed price threshold.

During the June 26-28 summit in Germany, the G7 leaders also reaffirmed their commitment to curb their countries' dependence on Russian energy, including through phasing out or banning the import of Russian oil and coal. At the same time, G7 encouraged oil producer countries to scale up their production to defuse tension in energy markets and mitigate impact on most vulnerable and impacted countries.