EU Proposes Cuts to Russian Oil Price Cap Amid Sanctions Efforts
The European Commission aims to reduce the seaborne crude oil price cap on Russia to $45 per barrel, as part of a broader sanctions package targeting Russian energy operations and infrastructure.
The European Commission has announced a proposed reduction of the price cap on Russian seaborne crude oil from $60 to $45 per barrel as part of its latest sanctions package against Russia.
This initiative, described as the eighteenth round of sanctions, comes in light of recent drops in oil prices, which have fallen below the previously established cap.
European Commission President Ursula von der Leyen emphasized the need to adapt to changed market conditions during a press briefing in Brussels.
Currently, companies from G7 countries are allowed to trade in Russian seaborne oil as long as it is priced below $60 per barrel.
However, the proposed adjustment will require unanimous consent from all European Union member states, including countries like Hungary and Slovakia, which have expressed opposition to additional sanctions.
The plan also necessitates support from the United States, which previously resisted similar efforts earlier this year, as illustrated by the G7 finance ministers' meetings in May.
EU officials are seeking a political agreement on the reduced price cap during the upcoming G7 summit scheduled for June 15-17 in Canada.
Notably, India, the largest oil-importing nation globally, has been invited to participate alongside other major economies such as Brazil and Mexico.
David O’Sullivan, the EU sanctions envoy, indicated that the initial aim for the new oil price cap is to secure agreement at the G7 level.
He stated that while there may be scenarios where the EU and G7 could move forward without American backing, a united G7 front is the preferable outcome.
In conjunction with the price cap reforms, the EU intends to intensify efforts aimed at dismantling Russia's 'shadow fleet' of tankers, with plans to target an additional 77 companies linked to these operations.
EU's top diplomat Kaja Kallas noted the significance of preventing sanctioned tankers from accessing ports, thereby increasing operational costs for Russia.
The new package is also set to impose restrictions on 22 foreign firms, including companies from China and Belarus, directly supporting Russia's military actions in Ukraine.
Furthermore, the sanctions will address operations linked to the Nord Stream gas pipelines between Russia and Germany.
Von der Leyen has affirmed that there will be “no return to the past” regarding the usage of these pipelines.
As part of the continuing sanctions, 42 new names—nine individuals and 33 entities—will be added to the list under the sanctions regime pertaining to Ukraine's territorial integrity, raising the total number of individual listings since February 2022 to over 2,500.
EU officials hope to finalize this sanctions package by the end of July.
This initiative, described as the eighteenth round of sanctions, comes in light of recent drops in oil prices, which have fallen below the previously established cap.
European Commission President Ursula von der Leyen emphasized the need to adapt to changed market conditions during a press briefing in Brussels.
Currently, companies from G7 countries are allowed to trade in Russian seaborne oil as long as it is priced below $60 per barrel.
However, the proposed adjustment will require unanimous consent from all European Union member states, including countries like Hungary and Slovakia, which have expressed opposition to additional sanctions.
The plan also necessitates support from the United States, which previously resisted similar efforts earlier this year, as illustrated by the G7 finance ministers' meetings in May.
EU officials are seeking a political agreement on the reduced price cap during the upcoming G7 summit scheduled for June 15-17 in Canada.
Notably, India, the largest oil-importing nation globally, has been invited to participate alongside other major economies such as Brazil and Mexico.
David O’Sullivan, the EU sanctions envoy, indicated that the initial aim for the new oil price cap is to secure agreement at the G7 level.
He stated that while there may be scenarios where the EU and G7 could move forward without American backing, a united G7 front is the preferable outcome.
In conjunction with the price cap reforms, the EU intends to intensify efforts aimed at dismantling Russia's 'shadow fleet' of tankers, with plans to target an additional 77 companies linked to these operations.
EU's top diplomat Kaja Kallas noted the significance of preventing sanctioned tankers from accessing ports, thereby increasing operational costs for Russia.
The new package is also set to impose restrictions on 22 foreign firms, including companies from China and Belarus, directly supporting Russia's military actions in Ukraine.
Furthermore, the sanctions will address operations linked to the Nord Stream gas pipelines between Russia and Germany.
Von der Leyen has affirmed that there will be “no return to the past” regarding the usage of these pipelines.
As part of the continuing sanctions, 42 new names—nine individuals and 33 entities—will be added to the list under the sanctions regime pertaining to Ukraine's territorial integrity, raising the total number of individual listings since February 2022 to over 2,500.
EU officials hope to finalize this sanctions package by the end of July.
