According to Poland’s EU ambassador, an adjustment mechanism is also envisaged that will keep the limit at least five percent below the market price.
Die EU-States have agreed on the level of a price cap for Russian oil. Together with international partners, they want to force Russia to start selling oil to buyers in other countries for a maximum of USD 60 (about EUR 57) per barrel (159 liters) from Monday. Government representatives reached a corresponding agreement after lengthy negotiations in Brussels, as several diplomats confirmed on Friday.
In order to enforce the price cap, it should be regulated that in future important services for Russian oil exports may only be provided with impunity if the price of the exported oil does not exceed the price cap. Western shipping companies could use their ships to continue transporting Russian oil to third countries such as India. The regulation should also apply to other important services such as insurance, technical assistance and financing and brokerage services.
The hope is that the price ceiling will ease the tension on the energy markets and relieve third countries. In addition, it should also ensure that Russia no longer benefits from rising oil prices and can thus fill its war chest.
Review every two months
In order to be able to react to market developments, the plans envisage reviewing the price cap every two months. It should always be at least five percent below one of the International Energy Agency (IEA) determined average price.
The price cap is intended to complement the oil embargo against Russia that the EU decided in June. Among other things, this provides for a ban on the purchase, import or forwarding of crude oil and certain petroleum products from Russia to the EU. The restrictions apply from December 5 for crude oil and from February 5, 2023 for other petroleum products. However, there are some exceptions, for example for Hungary.
After much hesitation, Poland has agreed to the price cap on Russian oil of 60 dollars per barrel that the European Union is aiming for. In addition, an adjustment mechanism is planned that keeps the limit at least five percent below the market price should a barrel of oil become cheaper than 60 dollars, said Poland’s EU ambassador Andrzej Sados on Friday. His country had argued for the largest possible discount on the market price in order to make it more difficult for Russia to finance the war against Ukraine. With Poland’s approval, the EU states can now formally wrap up the price cap that is to apply to Russian oil transported by sea over the weekend.
(APA/dpa)