Russia has rejected a $60 price cap for its oil set by Ukraine’s western allies and warned of a reaction, as President Volodymyr Zelenskyy said it was “quite comfortable” for Moscow amid pressure from Kyiv for a lower cap.
Kremlin spokesman Dmitry Peskov said Saturday that Russia will not accept the price cap, adding that it must analyze the situation before deciding on a concrete response.
The EU, G7 and Australia approved the $60 per barrel price cap for Russian sea oil on Saturday. It comes into force on December 5th.
“The G7 and all EU member states have taken a decision that will hit Russia’s revenues even harder and limit its ability to wage war in Ukraine,” European Commission President Ursula von der Leyen said in a statement.
“It will also help us stabilize global energy prices, which will benefit countries around the world currently facing high oil prices,” she said.
But Russia’s permanent representative to international organizations in Vienna, Mikhail Ulyanov, warned that the cap’s European supporters would regret their decision.
“From this year Europe will live without Russian oil,” Ulyanov tweeted. “Moscow has already made it clear that it will not supply oil to those countries that support anti-market price caps. Wait, very soon the EU will accuse Russia of using oil as a weapon.”
Al Jazeera’s Mohamed Vall said from Moscow that Russia had prepared in advance for this decision. “Russia knows that it must use an alternative infrastructure to export its oil to the countries that are not willing to sign this decision,” Vall said.
However, Russia’s biggest oil buyers – China and India – have not committed to the oil cap.
According to Friday’s agreements, insurance companies and other companies that need to ship oil would only be able to trade Russian crude if the price of oil is at or below the cap. Most insurers are based in the EU and UK and could be required to comply with the cap.
Russia’s crude has already been selling for around $60 a barrel, a significant discount from international benchmark Brent, which closed at $85.42 a barrel on Friday.
The EU will also stop all imports of Russian petroleum products from February 5th. A G7 price cap for petroleum products will also be set at a later date, using exactly the same mechanism as for crude oil, the commission said.
The price cap aims to squeeze Russia economically and further limit its ability to finance a war that has killed untold numbers of civilians and combatants, driven millions of Ukrainians from their homes, and strained the global economy for more than nine months.
Not seriously’
Ukraine’s president said the $60 price cap was not “serious”.
“Russia has already inflicted huge losses on all countries of the world by deliberately destabilizing the energy market,” he argued in his nightly address, calling the price cap decision “a weak position.”
It was “only a matter of time before stronger tools would have to be used anyway,” added Zelenskyy. “It is a pity that this time is lost.”
Kyiv said it had proposed a lower cap of $30 to “destroy the enemy’s economy faster.”
Al Jazeera’s Rory Challands said from Kyiv that Ukraine had called for a lower price cap and that the one adopted by the EU and the leading Group of Seven economies did not go far enough.
“Ukraine has been demanding a total embargo on all Russian energy products since the beginning of the Russian invasion,” Challands said.
“A price cap for Russian sea oil does not go far enough from the Ukrainian point of view.”
The shelling continues
Meanwhile, the General Staff of the Ukrainian Armed Forces reported that since Friday, Russian forces have fired five rockets, conducted 27 airstrikes and launched 44 shell attacks on Ukraine’s military positions and civilian infrastructure.
Kyrylo Tymoshenko, deputy head of the president’s office, said one civilian was killed and four others wounded in the attacks in eastern Ukraine’s Donetsk region.
In southern Ukraine’s Kherson province, whose eponymous capital was liberated by Ukrainian forces three weeks ago after a Russian withdrawal, Governor Yaroslav Yanushkevich said evacuations of civilians stuck in Russian-held territory across the Dnieper were temporarily resuming.
Russian troops retreated to the east bank of the river last month. Yanushkevich said a ban on crossing the waterway would be lifted for three days in daylight for Ukrainian citizens who “didn’t have time to leave the temporarily occupied territory.”
Ukrainian authorities also reported fierce fighting in Luhansk and Russian shelling of the Kharkiv region in north-eastern Ukraine, from which Russian soldiers largely withdrew in September.