European Union diplomats on Friday failed to agree on final details of a policy that would help limit Russia’s revenues from oil: Russia’s war with Ukraine.
For most of last week, ambassadors at the 27 EU member states meeting in Brussels said traders, shippers and other companies in the supply chain could pay for Russian oil sold outside the block. The highest possible price could not be determined. This policy must be implemented before the EU bans oil imports from Russia on December 5th. Negotiations are expected to resume next week.
The embargo only applies to the 27-country block. Therefore, to further limit Russia’s economic interests, the group wants to cap how much buyers outside the region pay for Russian oil. must be below the quoted price. Russia has repeatedly said it will ignore the policy, and analysts say it will be difficult to implement.
The United States and Europe have imposed sanctions on Russia since its full-scale invasion of Ukraine, cutting Russia off from its financial markets and making its biggest export, oil, essential to financing the war. At stake is a complex effort among Ukraine’s allies to limit the Kremlin’s revenues from oil exports while avoiding fuel shortages that will push up prices and exacerbate the global cost of living crisis. is a difficult endeavor.
EU ambassadors have been asked to set prices between $65 and $70 per barrel and to be flexible in enforcing restrictions.
The Russian oil price benchmark, known as the Ural Blend, has traded between $60 and $100 a barrel over the past three years. Over the past three months, prices have traded between $65 and $75 per barrel.
The burden of enforcing and enforcing price cap policies falls on the companies that help sell the oil. These global shipping and insurance companies are mostly based in Europe. Most of the tankers carrying Russian oil are owned by Greece, according to maritime data. And London is home to the world’s largest maritime insurance company.
Some EU ambassadors, particularly those of Poland and other loyal Ukrainian allies, said the price range proposed by the G7 was too high and that the cap should be set much lower to hurt Russia’s revenues. said, according to several EU diplomats directly involved, or briefed on the talks. They asked not to be named as they are not authorized to speak publicly.
These resistance ambassadors also want the oil price cap to go hand in hand with clear and immediate plans for further sanctions against Russia, without any assurance that additional sanctions are on the way. It refuses to sign the cap.
Greece, Cyprus and Malta, which had been pushing for higher caps because of their significant policy stakes due to their large maritime industries, were set to hit about $65 a barrel by Friday, diplomats said. agreed to
France, Germany and Italy — the three EU countries that are members of the group of seven developed nations pushing the Russian oil price ceiling — have joined many other EU member states in adopting higher and softer price ceilings. Argued in support of the U.S. position on touch-enforcement, the diplomat said.
The European Union’s embargo on Russia’s oil, starting December 5, also includes a ban on European services that transport, finance, or guarantee Russian oil shipments to destinations outside the bloc. It’s a measure that disables the infrastructure that moves oil to buyers around the world.
However, the price cap allows these European carriers to bypass the embargo as long as they ship Russian crude outside the block at prices below the cap. It is up to the company to enforce this. Otherwise, they will be held legally responsible for violating sanctions.