Oil prices increase with new G7 sanctions on Russia

France wants increased global oil output and return of oil from Iran and Venezuela

Oil prices surged on Tuesday. Illustration / AA

H. J. I.

Oil prices surged on Tuesday amid likely sanctions on Russia by G7 countries, including a price cap on oil exports.

International benchmark Brent crude was trading at $112.62 per barrel at 0640 GMT for a 1.48% increase after closing the previous session at $110.98 a barrel.

Energy security cooperation

American benchmark West Texas Intermediate (WTI) was at $111.15 per barrel at the same time for a 1.44% gain after the previous session closed at $109.57 a barrel.

The US and EU on Monday agreed to step up energy security cooperation with the end goal of further reducing Russia's revenues from oil and gas.

The leaders of the G7 countries are discussing a price cap on Russian oil to tackle inflation and reduce dependence on Russian supplies. By setting a limit on the price Russia can charge for its oil, Western countries hope to curtail Moscow's revenues while at the same time allowing more oil supply to reach the global market.

Energy crisis

Meanwhile, on the sidelines of the G7 meeting on Monday, France called on oil-producing countries to increase their production "exceptionally" and to carry forward negotiations to allow the return of oil from Iran and Venezuela back on the market to overcome the energy crisis.

Oil producers of the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, along with 10 other non-OPEC members, including Russia, known as OPEC+, are expected to remain loyal to the plan of increasing oil production for August at Thursday's OPEC+ meeting.

In its last meeting, the OPEC+ group decided to increase production by 648,000 barrels in July and August.