WASHINGTON—The U.S. and its partners are rushing to hammer out an agreement on a level for a price cap on Russian oil in the next couple of weeks as they seek to contain global oil costs in the wake of a production cut by the Organization of the Petroleum Exporting Companies and its Russia-led allies.
The Group of Seven large advanced democracies, along with Australia, are working to put into place a plan ahead of a Dec. 5 deadline that would bar the use of financing, insuring and shipping services for Russian oil unless the oil is sold below a set price limit.
Officials involved in the talks are aiming to establish and release the full price-cap plan at least a month ahead of the December deadline to give markets time to prepare for the novel sanctions regime.
Biden administration officials have denounced the OPEC production cut, which was in part a retaliation by producers for the U.S.-led price-cap push. Treasury officials have said they continue to move forward with the price-cap effort, with one saying that higher global oil prices could make buying Russian oil under price cap a more attractive possibility worldwide.
Discussions between the U.S. and its allies are now focused on the specific price for the cap, according to U.S. and European officials. Treasury Secretary Janet Yellen said this week that Russia had sold oil for around $60 a barrel in recent history—hinting at a possible level for the cap. That would set the price above Russia’s cost of production, which some Russian government documents put at roughly $45 a barrel. A $60-a-barrel price is also in line with historical prices for Russian oil.
Popular stories from WSJ.com: