GENEVA Reuters - New sanctions by G 7 countries on Russia will target its oil and products in three phases, senior U.S. treasury official Ben Harris told the European Crude Conference in Geneva on Tuesday.
Harris, Treasury's assistant secretary for economic policy, said G 7 sanctions will target Russian crude oil, while later ones will focus on diesel and finally on lower value products such as naphtha.
Following its invasion of Ukraine, the Group of Seven is trying to find a way to limit Russian profits from exporting oil.
Russia has largely maintained its revenues through increased crude sales to Asia, particularly China and India, despite the fact that many countries have banned imports of Russian crude and fuel.
The price at which Russian oil sales will be capped has not been decided, Harris said, and will be high enough to provide an incentive to maintain output and above the marginal production cost for Russia's most expensive oil well.
Sanctions from both the G 7 and the European Union are due to begin on December 5.
The EU will ban shipping of Russian oil from Dec. 5 and products from Feb. 5, cutting the trade off from financial services and possibly halting it worldwide.
Three EU diplomats said that the proposed new EU sanctions aim to match the oil price cap agreed by the G 7 powers.
Harris said the G 7 sanctions should be seen as a way to continue trading, and that the aim was to ensure Russian oil continued to flow.
He said that the price cap can be a release valve on the EU sanctions package. It transforms the ban from an absolute ban to a conditional ban.