Russian Crude Oil on Verge of Busting Western Sanctions 'Price Cap'

US-led attempts to force Russia to sell its crude oil at below market price have faced several hurdles, not least the reluctance of many of its NATO allies to cut themselves off from the world's third-largest producer.

The market price of Russian crude oil is on the verge of breaking through the $60-per-barrel artificial price cap imposed by Western powers.

The spot price of Urals crude has been rising since May, and on Tuesday hit $59.98 per barrel at the Black Sea port of Novorossiysk.

The barrel-head price at Primorsk on the Baltic Sea also rose to $59.38 the same day.

The G7 group of developed nations — the US, UK, France, Germany, Italy, Japan and Canada plus the European Union (EU) — agreed in December to pay no more than $60 per barrel for Russian crude as part of sanctions on Moscow over its special military operation in Ukraine.

The plan included a ban on oil tankers flagged in those countries from shipping Russian oil sold at above that price — but excluded shipments via pipelines that run through several EU and NATO member states including Hungary.

The US-led bloc has struggled to enforce the ban as tankers flagged in other nations load crude at Russian terminals and transfer it to Europe-bound ships in international waters.

Russia has responded by cutting its oil production, putting further upward pressure on market prices and expanding its own tanker fleet to outflank attempts to enforce the embargo.

On Wednesday, Brent crude futures were trading at $79.75 per barrel.

The G7 was formerly known as the G8 until 2014, when Russia was excluded after residents of Crimea overwhelming voted to secede from Ukraine and reunite with their historical homeland of Russia.