Two of the toughest measures to curb Russia's oil revenues began in Europe and the United States.


[Financial Channel/Comprehensive Report] The New York Times reported that Europe and the United States on Monday (5th) began to implement two of the most severe measures to limit Russia's oil revenue, the main source of cash for Moscow's nearly 10-month war against Ukraine. .

The first measure, a US-led price cap initiative aimed at increasing economic pressure on the Kremlin while avoiding a global oil shock, was set at $60 a barrel and endorsed by the Group of Seven, Australia and the European Union.

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The second is the embargo, which will prevent European countries from buying most Russian crude oil starting Monday.

This is an approach the EU agreed to a few months ago, but is being phased in to get member states ready.

However, analysts and traders are skeptical about the effect of the price cap, as it could be difficult to manage and would mainly hit big Russian oil customers such as India and China.

U.S. officials say they are trying to avoid a sudden contraction in supply and a resulting spike in gasoline and heating oil prices as the EU embargo takes effect.

Russia has said it will not accept the price cap and has threatened to cut off supplies to countries that abide by the arrangement.

Analysts say Russia has been building a so-called shadow fleet of old tankers to export oil and avoid sanctions, but they doubt it will be able to build a large enough fleet, and if it can't, it may need to start shutting down oil well.

International benchmark Brent crude was trading around $87 a barrel in early trade on Monday, below the $90 price target many analysts believe Saudi Arabia is seeking.

If prices fell sharply from that level, Saudi Arabia could cut production despite protests from Ukraine and its allies, according to market watchers.

The outlook for the oil market in the coming weeks is uncertain, analysts said.

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