Despite the urgency, there is still no agreement on the Russian oil price ceiling –

EU member states are running out of time to agree on a price cap for Russian crude shipments after another round of inconclusive talks between European Union ambassadors on Monday evening (November 28).

The EU will ban almost all oil imports from Russia next Monday (5 December), a measure to be combined with the international price ceiling for exports with Russian shipments. But after a few days I’With these measures in force, Member States are still unable to agree on a cap.

There is no agreement. The legal texts have been approved, but Poland still refuses to agree to the prizex,” said a European diplomat.

Brussels is working with G7 countries to cap the price of Russian oil shipped by sea. The G7 countries propose to limit oil at the level of 65-70 dollars per barrel.

The goal is to keep the oil flowing while reducing Moscow’s ability to finance its war in Ukraine. Therefore, Russian oil exports will have to be sold at a higher or lower level or risk being denied shipping insurance and reinsurance.

Compared to the gas price cap currently negotiated by EU member states, the oil price cap will only apply to Russian imports and will be a new sanction in response to Russia’s intervention in Ukraine.

Mixed Poland

EU ambassadors discussed during the talks on Monday ofcap 62 Dollars per barrel for Russian crude oil exports.

However, several EU diplomats said consensus remained elusive because some countries wanted to set a lower price.

The Poles are completely uncompromising on price without offering an acceptable alternativeEuropean diplomat said.

The most pessimistic member states, led by Poland, believe that price would be ineffective because it is too close to what Russia already fetches on the market, meaning sanctions would not punish the Kremlin enough to cripple its economy. war.

Poland, Lithuania and Estonia require a lower threshold of around $30 wish The implementation of this restriction should be linked to the promise of preparing the ninth package of sanctions against Moscow.

“There are still three elements that need to be discussed : the criteria for determining the price ceiling, the inclusion of the mechanism in the new sanctions package and the price level with the ceiling”the diplomat explained in EURACTIV.

Russia’s oil and gas exports are expected to account for 42% of the country’s income this year, or 11.7 trillion rubles, up from 36% or 9.1 trillion rubles in 2021, Reuters reported, citing the Russian Finance Ministry.

Reuters reports that Ukrainian President Volodymyr Zelensky said on Saturday (November 26) that the cost of transporting Russian oil by sea should be limited to between 30-40 dollars/barrel.

Mediterranean concession

Other price cap skeptics have already lost ground.

Some of the bloc’s member states, including major maritime industries such as Greece, Malta and Cyprus, wanted to ensure the price was high enough to sustain trade with Russian oil, a position likely to be supported by the United States. .

These countries have had concernsbroke upDuring Monday’s talks, EU diplomats said before adding that pressure must increase on more aggressive member states to make concessions.

France, Germany and several other countries are quite critical of Poland, they feel that the Mediterranean has made too many concessions and now is the time for reciprocity.“, the second European diplomat explained.

The deadline is approaching

According to European diplomats, a new date for the talks has not yet been set, although the price cap mechanism will come into effect on December 5. Negotiations in Brussels are expected to be concluded by the end of the week.

In May, after several weeks of negotiations, EU leaders agreed to a partial embargo on seaborne crude oil imports that will come into full force at the end of 2022.

Hungary, Slovakia and the Czech Republic were later exempted from this ban for pipeline imports, on which they depended.

If no agreement is reached on the idea of ​​a G7 price cap next Monday, the bloc will have to implement tougher measures agreed at the end of May. Some European diplomats have warned that these include a ban on all imports of Russian crude oil from December 5 and oil products from February 5, 2023.

Right nowIt is not possible to know whether further regulatory discussions would be needed if the EU were to adopt thresholds outside the price range proposed by the group. level G7.

How the cover works

Once implemented, the price cap will apply to any vessel carrying Russian oil, regardless of flag.

Shipping companies will only be allowed to carry oil that is sold at or below the agreed limit.

If a ship is found to be carrying Russian oil without complying with the cap, it will lose access to services such as insurance.

Whether it will be possible to provide adequate control remains open, but the EU intends to join forces with major marine insurance countries such as the UK to give weight to the sanction.

[Édité par Anne-Sophie Gayet]

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