The EU agreed to a cap on the price of Russian oil as part of the sanctions imposed on Moscow for invading Ukraine. The Kremlin’s reaction was not long in coming: “Very soon the EU will blame Russia for using oil as a weapon,” they said, following announcing that they would not send more crude under those conditions.
Russia will stop supplying oil to Europe this year, following the European Union (EU) decided to fix the price of a Russian barrel at a maximum of 60 dollars a barrel.
This was stated this Saturday by the Russian ambassador to international organizations in Vienna, Mikhail Ulyanov.
“Starting this year #Europe will live without Russian oil. #Moscow has already made it clear that it will NOT supply #oil to countries that support price caps once morest the market,” Ulyanov wrote on his Twitter account and other social networks.
“Very soon the #EU will blame #Russia for using oil as a weapon,” the Kremlin representative predicted in his brief statement.
Starting from this year #Europe will live w/o Russian oil. #Moscow has already made it clear that it will NOT supply #oil to those countries who support anti-market price cap. Very soon the #EU will blame #Russia for using oil as a weapon.
— Mikhail Ulyanov (@Amb_Ulyanov) December 3, 2022
The countries of the European Union (EU) agreed on Friday to set a cap on the price of Russian oil of 60 dollars per barrel, as part of the sanctions imposed on Moscow for its aggression once morest Ukraine.
The measure, to which the G7 powers (United States, Canada, Germany, France, United Kingdom, Italy and Japan) and Australia have adhered, would not directly affect the community territory because it coincides with the entry into force, on Monday, of an embargo on the crude it imports from Russia, except for the one that Hungary buys by pipeline.
However, it prohibits European shipping companies from transporting Russian oil to third countries if it is sold at a higher price than the one set, and the same will apply to insurance companies contracted for Russian crude freight.
The EU political agreement guarantees that if the market price falls below $60 a barrel, the ceiling will be updated so that it is at least 5% below what it has on the market.
Moscow had already warned that it would stop selling its “black gold” to those countries that apply a cap on the price of a barrel, considering that this intervention violates the rules of the free market.
Zelenski reproaches the fixed price
The Ukrainian president, Volodimir Zelenski, criticized the maximum price of 60 dollars for a barrel of Russian oil, since -in his opinion- “it is not a serious decision to set this limit (…) since it is comfortable for the budget of the terrorist State ”, assured the Ukrainian president, who said that a maximum price should be set two times lower.
The current cost of a barrel of Russian oil (Ural crude) is around $65, so setting it at a maximum of $60 will have limited impact.
“The logical thing would have been to set a maximum price for a barrel of Russian oil at $30, instead of $60, as proposed by Poland or the Baltic countries,” Zelensky said.
During the negotiations, Ukraine’s close ally Poland wanted the EU to impose a much lower ceiling to speed up the demolition of the Russian economy, and the presidential chief of staff in kyiv, Andriy Yermak, lamented that this did not happen. “It would have had to be reduced to 30 dollars [el barril] to destroy it more quickly,” he wrote.
Support to energy markets
The G7 assured that it intends in this way “to prevent Russia from obtaining profits from its aggressive war once morest Ukraine” and “to support stability in world energy markets.”
The White House said the Europe deal “will help limit Putin’s ability to profit from the oil market to finance a war machine that continues to kill innocent Ukrainians.”
