EU puts Russia oil price cap in thefast lane

EU puts Russia oil price cap in thefast lane
Brussels struggles for unity on measure to cut Putin’s war funds
Brussels is racing to finalise the proposed price ceiling on Russian oil shipments in the coming days after EU governments clashed over the level of the cap and whether to link it to a wider roundof sanctions. The EU was struggling to settle its differences over the weekend as it attempted to stay ahead of a December 5 deadline,when a previously agreed EU embargo on seaborne Russian oil kicks in. Talks have stalled in recent days as Poland has led a push for a far lower price ceiling than the European Commissionadvocates. Brussels has been working alongside the G7 nations to implement the proposed price ceiling on seaborne Russian oil with the goal of allowing the flow to continue while pushing down Moscow’s ability to funditswarinUkraine. The initiative would ban insurance and other services essential to the seaborne shipment of Russian crude unless soldator belowaG7-agreed pricelevel. But while EU member states are willing to sign up to themeasure, they differ on the level of that cap. “This is a momentwhenwe need to send clear signals of unity to [Russia president] Vladimir Putin,” saidoneEU diplomat. The commissionis pushing for amaximum price level of $65 a barrel, but hawkish member states led by Poland say this would be ineffective because it is too close to the price Russia already gets on the markets, meaning the sanctionwould not punish theKremlin. Brent crude, the international benchmark, is trading at about $84 a barrel, but Russia’s oil has fallen to a steep discount as European buyers turn away, with its main Urals grade trading at about $66 a barrel. Warsaw has been demanding amuchlower price, arguing it is necessary to ensure Putin’s oil revenuesare curtailed. Warsaw also wanted to include the oil price capin awider ninth package of EU sanctionsonRussia, theofficial said, but the commission is concerned that this could further snarl up negotiations. Poland and other states are also haggling over a review mechanism for the pricelevel. Other EU states, including those with big shipping industries such as Greece, Malta and Cyprus, want to ensure the priceis sufficiently high to keep tradein Russian oil flowing— a positionlikely to be supported by theUS. The US Treasury has led the push to introduce the G7 price cap partly due to concerns EU sanctions could trigger an inflationary surge in oil prices if too muchRussianoil cannotmakeit tomarket. If the price cap level is set too low, analysts argue, Russia could lose the incentive to keep producing, preferring instead to curtail output to drive up global prices to compensate. Bringing the oil price cap into force will require action not only by the G7 allies but also unanimous agreement among the 27 EU member states, because it means amending the already agreed EU embargo on Russian seaborneoil that startsonDecember5. Next Sunday, Russia is also due to meetmembers of the Opec+ group such as Saudi Arabia to discuss production policy, setting up a critical week for the oil market. The commission declined to comment. 
Nov 28, 2022 13:31
financial times |

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The section of oil, gas and petro-chemistry is the up-most and first industrial vantage of the country and the pivot of the Economy of Iran. Regarding the importance of this section and the need for coordinating and organizing the most active people in the field of production and exporting oil ,gas, and petrochemical products ,some forethoughtful and job- makers in the private section of the country decided to come together to fight against the threats by using the opportunity of mass intelligence and potentials.