US energy envoy: Russian oil price cap "working well"

US Energy Envoy Amos Hochstein has said that the price caps imposed by the G7 and allies to force Russia to sell its crude and fuel at a discount are working well.

The United States was one of the architects of price caps on Russian oil, which aimed to prevent a major disruption of supplies from Russia but drive down Moscow's income from crude and fuel exports, according to Reuters.

The Group of Seven countries, the European Union and Australia implemented the price cap on seaborne cargoes of Russian oil on Dec. 5, setting it at $60 a barrel as part of sanctions on Russia for its invasion of Ukraine. On Feb.5, the G7 and allies implemented a price cap on Russian fuel sales.

"I think the beauty of the process is that it is working and that Russian oil and Russian products are being traded below the price cap," Hochstein told reporters on the sidelines of an energy conference in Houston.

Russia, which produces around 10 per cent of global oil supplies, announced in February it would cut output by 500,000 barrels per day, or about five per cent of Russia's output in response to the price cap.

Hochstein said the cut had had little impact on the prices buyers were paying for Russian oil.

"I don't know why Russia is cutting their production," he said. "I think the price has not gone up that much. We want to make sure that Russian barrels are on the market and are trading at a discount."

The US was happy to see Russian crude and fuel shipments going to countries that had no sanctions on imports as long as it was trading below the price cap.