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US Says Russia Oil Cap Needed as EU Sanctions Not Yet Priced In

A gas drilling rig on the Gazprom Chayandinskoye oil, gas and condensate field in the Lensk district of the Sakha Republic, Russia.

A gas drilling rig on the Gazprom Chayandinskoye oil, gas and condensate field in the Lensk district of the Sakha Republic, Russia.

Source: Bloomberg

The oil market hasn’t yet priced in the impact of European Union sanctions aimed at Russian supplies, which adds impetus to a US plan to cap the price of the country’s exports to avoid a price spike, according to a US Treasury Department official.

The US is aiming to get an international agreement on a Russian oil price cap to go into effect the same time as EU actions in December, or possibly even earlier, said the official, who asked not to be identified because the discussions aren’t public.