The Group of Seven price cap comes as the West tries to limit Moscow's ability to finance its war in Ukraine.

The Group of Seven (G7) countries and Australia last week agreed on a $60 a barrel price cap on seaborne Russian oil.
The Group of Seven (G7) countries and Australia last week agreed on a $60 a barrel price cap on seaborne Russian oil. (Reuters Archive)

Oil prices have edged higher after a G7 price cap on Russian seaborne oil came into force on top of a European Union embargo on imports of Russian crude by sea.

Brent crude futures LCOc1 rose 66 cents to $83.34 a barrel by 0108 GMT on Tuesday. West Texas Intermediate crude (WTI) CLc1 rose 70 cents to $77.63 a barrel. 

Futures fell more than 3 percent in the previous session, after US service sector data raised worries that the Federal Reserve could continue its aggressive policy tightening path. 

The Group of Seven price cap comes as the West tries to limit Moscow's ability to finance its war in Ukraine, but Russia has said it will not abide by the measure even if it has to cut production. 

The price cap, to be enforced by the G7 nations, the European Union and Australia, comes on top of the EU's embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain.

READ MORE: OPEC+ to maintain oil output levels amid uncertainty over Russia price cap

Output cut

Meanwhile, the Organization of the Petroleum Exporting Countries and allies including Russia, together called OPEC+, agreed on Sunday to stick to their October plan to cut output by 2 million barrels per day (bpd) beginning in November.

The Group of Seven (G7) countries and Australia last week agreed on a $60 a barrel price cap on seaborne Russian oil.

In China, more cities eased Covid curbs over the weekend, prompting optimism for increased demand in the world's top oil importer.

Business and manufacturing activity in China, the world's second-largest economy, have been hit this year by strict measures to curb the spread of the coronavirus.

READ MORE: What to expect if the US and Europe cap the price of Russian oil?

Source: Reuters