Media reported that the European Union (EU) is in talks to find consensus on setting a ceiling on Russian oil prices. It is expected that the meeting will reach an agreement today.
The source said that the EU meeting discussed setting a ceiling on Russian oil prices at $60 per barrel. And to review such measures every two months in the hope that such proposals will help the meeting reach consensus. After the EU members had previously differed opinions on the issue.
The meeting’s draft statement set a ceiling on Russian oil prices at $62 per barrel as a compromise between the bloc within the EU.
The measure aims to reduce Russian oil prices by selling oil to support the war in Ukraine. But it must not affect the global oil supply to the point of causing a shortage.
The Group of Seven (G7) industrialized nations had proposed setting a ceiling on Russian oil prices in the range of $65-70/barrel, but Poland, Estonia and Lithuania viewed it as too high. At the moment, Russian Ural oil prices are at a lower level. This will make setting a price ceiling in the $65-70 range inefficient.
Poland wants to set prices at $30/barrel. Because Russia’s production cost is only 20 dollars / barrel. And the issue of capping Russian oil prices is included in the new sanctions.
As for Cyprus, Greece and Malta, the $65-70/bbl range is too low. And want to pay compensation to the business sector affected by the ceiling on oil prices. Including asking for a grace period for adapting to support such measures.
The G7, along with the EU and Australia, are set to impose ceilings on Russian oil prices on Dec. 5, which will apply to Russian oil shipped via tankers. Excluding oil transported through oil pipelines.
The price cap is set as a punitive measure for Russia’s military invasion of Ukraine on Feb. 24. shipping company Non-life insurance company and reinsurance companies It cannot provide any services related to the transportation of Russian oil cargoes above the ceiling set by the G7 and its partners.
If the EU fails to reach a consensus on setting a ceiling on Russian oil prices, it will force the EU to take tougher measures by announcing a suspension on all crude oil imports from Russia starting Dec. 5. All petroleum products from Russia from February 5, 2023, which will have a serious impact on the global oil market.
By InfoQuest News Agency (02 Dec. ’22)
Tags: Russia, oil price, European Union, EU