The European Union and Russia agreed on a price ceiling of 60 dollars for a barrel of oil imported from Russia. The original price initially proposed by the EU countries was $65, but in negotiations the price was lowered.
In the European Union, the agreement is seen as an achievement mainly because it may ensure the flow of oil to the European market and as is known there is a great shortage of energy sources in Europe.
In practice, by the way, this is a higher price than the price at which Russia already sells the crude oil it exports to Europe. The Russian oil of the Ural type was sold this week for 45-50 dollars per barrel. If you will – Russia actually wins here and takes advantage of Europe’s critical need for Russian oil. In any case, the purchase agreement has a mechanism that will make it possible to make price changes every two months, but this will be at a level that is at least 5% lower than the average market price.
The approval of the European Union is the first step. It is necessary to approve the agreement also in the G7 group and it seems that there they have already given their consent orally. This agreement coincides with the desire of Europe in particular and the world in general not to consume oil and gas from Russia. Most of the G7 countries will stop importing crude oil from Russia by the end of the year. At the same time, a European Union ban on the import of refined petroleum products from Russia will enter into force in about two months.
Europe is trying to rely on additional sources. In the meantime, the US is enjoying this very much – selling oil to Europe, and later, although this is a process of several years, the gas producers in the Middle East, including the Israeli drillers, are also expected to benefit from this – Israel, along with Egypt, are expected to supply gas to Europe, after the construction of the appropriate infrastructures.
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