Ukraine sees it as a tool capable of ” destroy “ the Russian economy, when some experts fear that it will destabilize the world oil market. On Friday 2 December, after weeks of discussions, the European Union, the G7 and Australia managed to agree on “a maximum price of 60 US dollars for crude oil of Russian origin transported by sea”.
By thus targeting the Russian energy windfall – the country is the world’s second largest exporter of crude oil – Westerners are attacking Moscow’s wallet. They hope to limit his means to finance his war in Ukraine.
G7 wants to cap Russian oil prices
Brussels hopes to stabilize energy markets
Even if the impact of this ceiling is limited in the short term – the price of a barrel of Russian oil (crude from the Urals) is currently hovering around 65 dollars – it ” will help stabilize global energy markets (…) and will directly benefit emerging economies and developing countries”since Russian oil can be delivered to them at prices below the ceiling, assured on Twitter the President of the European Commission, Ursula von der Leyen.
This tool has been waiting to see the light of day since the G7 finance ministers, meeting in Germany, reached an agreement in principle on this mechanism in early September. The Twenty-Seven in turn reached a consensus on Friday 2 December. The mechanism is due to come into force on Monday – the day the EU begins an embargo on Russian oil by sea which is to cut two-thirds of its crude purchases from Russia – “or very soon after”, specify the G7 and Australia. As Germany and Poland have also decided to stop their deliveries via an oil pipeline by the end of the year, total Russian imports will be affected by more than 90%, say the Europeans.
Embargo on Russian oil: why the European Union hesitates
“We are in the unknown”
Concretely, only the oil sold by Russia at 60 dollars or less can continue to be delivered. Beyond that, companies will not be able to provide services allowing maritime transport (freight, insurance, etc.), 90% of which are provided by the G7 countries.
Moscow, which has made 67 billion euros from its oil sales to the EU since the start of the war in Ukraine, repeated on Saturday December 3 that it “will not accept this ceiling”which the Russian presidency is not prepared for, without giving further details.
All eyes will now turn to big buyers like India and China, and to the OPEC producing countries, which meet Sunday, December 4 in Vienna. Some experts fear their reaction and fear a destabilization of the world market. “An oil price ceiling has never been seen. We are in the unknown”alarmed Phuc-Vinh Nguyen, expert in energy issues at the Jacques-Delors Institute, interviewed by AFP.
The only certainty, according to him: a cap, even at a high price, will send “a strong political signal” to Vladimir Putin, because, once in place, this mechanism can be tightened.