The price cap was imposed on Monday by the G7 industrial democracies and Australia at a level above the current price for Urals crude from Russia, the world's second largest oil exporter. The cap aims to both cut Russian revenues from oil price spikes caused by its war on Ukraine, and ensure that Russian oil continues to flow to buyers including China and India, keeping global market prices under control. The official added that G7 countries and Australia would be busy in coming weeks determining two more price cap levels on Russian refined oil products slated to be in place by Feb. 5. Treasury is "skeptical" that Russia would be able to sell all of its oil exports above the price cap to countries including India and China, the official said. Analysts say that as the oil price cap plan evolved, its emphasis shifted from a mechanism to squeeze Russia's revenues, to one that ensures ample oil supply and locks in market discounts.

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