“Russia has already inflicted enormous losses on every country in the world by deliberately destabilizing the energy market,” Zelenskyy said in his evening video address. The decision for a price cap is therefore “a weak position”. It was “only a matter of time before heavier instruments had to be used anyway”, added Zelenskyy. “It is a pity that this time it was lost.”
The market price for Russian oil from the Urals is currently around 65 dollars per barrel (just under 62 euros), the maximum price provides for an upper limit of 60 dollars. A price cap of $60 per barrel of oil would still allow Russia to generate about $100 billion a year, Zelensky said. “That money will also be used to further destabilize the very countries that are now trying to avoid far-reaching decisions.”
Agreement on price cap for Russian oil
EU countries agreed to a price cap on Russian oil – believing it would weaken Russia. From Monday, there will be a price cap on oil coming from Russia by sea.
Yermak: Requires a price of $30 for Destruction
In order to “destroy” the economy of the Russian enemy more quickly, it is necessary to reduce the price to $30, announced on Saturday the head of the Ukrainian presidential office Andriy Yermak before Zelenskyy. Meanwhile, Russia sees the move as a violation of free market laws. According to the TASS agency, President Vladimir Putin’s spokesman, Dmitry Peskov, said they were prepared and would quickly analyze the situation and then comment on concrete measures.
Must apply from Monday
After long and difficult negotiations, EU states had previously agreed to a price cap on Russian oil, the G-7 (i.e. US, Canada, France, Germany, Britain, Italy and Japan) and Australia joined. The states want to force Russia to sell oil below the market price to buyers in other states in the future. The aim is to dry the Kremlin’s war chest. According to the plans, the price cap is to be applied from Monday.
Economist: “Russia will be hit hard”
According to energy economist Claudia Kemfert of the German Institute for Economic Research (DIW), the oil price ceiling would hit Russia’s war chest hard. “This will hit Russia hard, income will no longer be as plentiful,” she said at Deutschlandfunk on Saturday.
debate
Ukraine: what’s next in winter?
One should not forget: “Russia has already made gigantic sums of money this year from the high prices of fossil energy in general, including oil”. 🇧🇷
Linked to important services
In order to enforce the price cap, it should be regulated that, in the future, important services for Russia’s oil exports can 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.
US Treasury Secretary Praises Measure
US Treasury Secretary Janet Yellen praised the price cap as a result of months of efforts by the states involved. “Together, the G-7, the European Union and Australia have set a price cap on Russian oil that will help us achieve our goal of limiting Putin’s main source of revenue from his illegal war in Ukraine while preserving energy stability. received,” she said, referring to Russian President Putin.
Feichtner (ORF) on oil price ceiling
ORF correspondent Benedict Feichtner reports from Brussels on the EU countries’ agreement on an oil price cap.
Should complement the oil embargo
The price cap is intended to complement the oil embargo against Russia that the EU decided in June. Among other things, it provides for a ban on the purchase, import and shipment of crude oil and certain petroleum products from Russia to the EU. 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.
Member states took the pivotal decision to introduce a price cap on Russian oil in October – after the G-7 had already launched a corresponding initiative.