Home >> News Room >>EU agrees on price cap of US$60 a barrel on Russian seaborne oil

News Room

EU agrees on price cap of US$60 a barrel on Russian seaborne oil

Author:   Posttime:2022-12-06

EUROPEAN Union (EU) governments tentatively agreed last Thursday on a US$60 a barrel price cap on Russian seaborne oil - an idea of the Group of Seven (G7) nations - with an adjustment mechanism to keep the cap at 5 per cent below the market price, an EU diplomat said.

The initial G7 proposal last week was for a price cap of $65-70 per barrel with no adjustment mechanism.
Since Russian Urals crude already traded lower, Poland, Lithuania and Estonia rejected that level as not achieving the main objective of cutting Moscow's revenues and its ability to finance its war in Ukraine, reports Reuters.
"The price cap is set at $60 with a provision to keep it 5 per cent below market price for Russian crude, based on IEA figures," the EU diplomat said. The reviews of the price cap level would be held every two months, EU diplomats said.
EU diplomats said that Lithuania and Estonia, which had backed Poland's push to set the cap as low as possible, were also on board with the $60 limit. Russian Urals crude URL-E was trading at $70.3 a barrel last week.
The G7 price cap on Russian seaborne crude oil kicked in yesterday (December 5), replacing the harsher EU outright ban on buying Russian seaborne crude, as a way to safeguard global oil supply because Russia produces 10 per cent of the world's oil.
The idea to enforce the G7 cap is to prohibit shipping, insurance and re-insurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price set by the G7 and its allies.
Because the world's key shipping and insurance firms are based in G7 countries, the price cap would make it very difficult for Moscow to sell its oil for a higher price.

source:{非本站网址}

Related posts