Russia is preparing a solid response to the oil price cap mechanism set by G7 and EU recently at 60 USD per barrel for Russian crude. According to two officials of the plans, Putin is considering putting a price floor on their crude oil exports.
According to Bloomerg, This oil price floor plan will see Moscow either imposing a fixed price for Russian oil barrels or stipulating maximum discounts at which its oil can be sold.
Here is how the price floor will work by countering two ways to western price cap. One approach is fixing the price of oil export from Russia to the west and this price cap indeed will be much higher than the price cap set by G7 and EU Nations. The second approach could be put a discount on the regular oil price. Both the fixed price and the cap on discounts Russia offers to buyers will regularly be revised based on the prevailing global energy market conditions.
According to on Russian officials, Russia aims to offer a more transparent price mechanism to its buyers and additionally the official added that Russia will come with the mechanism by the end of this month.