The G7 price cap on Russian crude oil sales came into force on 5 December following months of negotiations which finally came to fruition late on 2 December. Implementation of the cap in conjunction with the EU embargo on Russian crude imports marks a major turning point in global oil trade, adding significant friction into the functioning of markets.

Yet markets were softening even in the run-up to this seismic event and have continued to soften since its implementation. ICE Brent settled below $80/B on 6 December for the first time since 3 January and has dropped further since . It’s not just outright prices that have weakened. The front of the Brent curve once again flipped into a mild contango on 6 December, signaling an oversupplied market. The front of the curve has been flipping between contango and backwardation of late, adding further to market uncertainty. (CONTINUED - 983 WORDS)