The EU negotiates to cap the price of a barrel of Russian oil at 60 dollars to suffocate the Kremlin

The European Commission has proposed to the Twenty-seven to set the maximum price per barrel of Russian oil bought by third countries at 60 euros, a figure lower than those that had been considered up to now with which it is intended to break the blockade in internal negotiations to comply with the agreement reached by the G7 in September and later endorsed by the Union to cap the price of crude oil purchased by third countries.

NewsEditor
NewsEditor
01 December 2022 Thursday 05:37
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The EU negotiates to cap the price of a barrel of Russian oil at 60 dollars to suffocate the Kremlin

The European Commission has proposed to the Twenty-seven to set the maximum price per barrel of Russian oil bought by third countries at 60 euros, a figure lower than those that had been considered up to now with which it is intended to break the blockade in internal negotiations to comply with the agreement reached by the G7 in September and later endorsed by the Union to cap the price of crude oil purchased by third countries. The objective of the measure, the same as that of the wide range of economic sanctions adopted against Moscow: to stifle its Kremlin war machine.

The agreement enters into force this Monday, December 5, but due to the lack of agreement in the discussions between the ambassadors of the member states in the middle of this week, it was decided to suspend the talks. Today they have sat down again to negotiate. Diplomatic sources have confirmed to La Vanguardia that the latest proposal consists of capping the price of a barrel of Russian oil at 60 dollars, slightly above what is currently paid for its main products.

The EU already adopted in May a partial embargo on Russian fuel in its internal market. This measure is designed to influence transactions with third countries and it is expected to be applied through regulations that affect companies related to this business, from transport companies to insurance companies. The initial proposal of the European Commission was to limit the price to between 70 and 65 dollars per barrel, a figure that Poland and other Baltic countries considered too high and ineffective and defended lowering it to 30 dollars, to approximate the cost of production. Meanwhile, countries like Greece and Malta, with immediate interests in this sector, demanded not to go below 65 dollars.

The agreement requires the unanimity of the Twenty-seven. In economic terms, it's a delicate balance. "Oil is the largest source of revenue for the Russian budget, so it is very important to get it right so that it really has an impact on Russia's ability to finance this war," the Vice President of the European Commission, recalled this week. Valdis Dombrovskis. For it to work, the fixed price must mean a cut in the income of the Russian state. But, at the same time, it must not be too strict so that it does not affect production and cause a rise in global prices. In statements to Reuters, sources from the Biden administration, which is going to apply a cap in coordination with the EU, have distanced themselves from the information that pointed to a price of around 52 dollars.

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