G7 g-7 grop photo 2022
© AP Photo/Markus Schreiber, Pool
The Confederacy of Dunces known as the G-7 meet in Germany in 2022
From left, Italy's Prime Minister Mario Draghi, European Commission President Ursula von der Leyen, U.S. President Joe Biden, German Chancellor Olaf Scholz, British Prime Minister Boris Johnson, Canada's Prime Minister Justin Trudeau, Japan's Prime Minister Fumio Kishida, French President Emmanuel Macron and European Council President Charles Michel. ()
Members of the Group of Seven leading industrial nations are seeking to put in place their proposed price cap on Russian oil exports by Dec. 5, a senior G-7 official said as leaders race to stabilize a volatile market and starve Russia of its main source of funding for the war in Ukraine.

The G-7 official told Reuters that the goal is to coincide the timing of the price cap with the European Union's sanctions package banning seaborne imports of Russian crude.

"The goal here is to align with the timing that the EU has already put in place," the official said. "We want to make sure that the price cap mechanism goes into effect at the same time."

U.S. Treasury Secretary Janet Yellen has been a key figure in ginning up support for the plan, traveling this month to meet with her counterparts in Japan and South Korea. She also spoke by phone with leaders from China and India, countries that have benefited heavily from discounted Russian crude and were considered to be key holdouts in adopting the plan.

Though it is unclear what levers G-7 nations can, or have pulled, to get them on board, the official seemed optimistic, telling Reuters that both countries are "interested" in the idea of minimizing oil import costs due to concerns about the budget impact through "often-subsidized retail prices and inflation."

"We've already heard from a number of Asian countries that are interested in either joining the coalition or better understanding the price point at which the price will be set in order to strengthen their hand in their negotiations with the Russians over future contracts," the G-7 official said.

Under the price cap plan, which G-7 leaders endorsed last month, participating nations would form a sort of "buyers' cartel" to cap Russian crude at a lower-than-market price.

The goal of the plan, analysts explain, is to set prices slightly above Moscow's marginal cost of production — but as close to the number as possible.

Too low, and leaders risk Russia retaliating and shutting down production completely. Too high, and the cap fails to achieve its intended effect.

Last week, Russia's central bank chief, Elvira Nabiullina, told reporters she believes Moscow would refuse to sell oil to any countries that sign on to a price cap plan.

Comment: Keep in mind, Moscow never bluffs. They're quite willing to let the clown-car West run right off the cliff.

Nabiullina also suggested the plan could upend global oil markets, echoing former Russian President Dmitry Medvedev, who warned earlier this month that global oil prices could "exceed $300-$400 per barrel" if the price caps were implemented.

Analysts have also warned there is a risk of an increase, though their estimates are much more modest — somewhere between $140 and $200 a barrel.