EU countries failed to reach an agreement on a price cap for Russian oil products, with the deadline to fix the price now just days away.
Talks between EU ambassadors that were to resume on Thursday have now been postponed until Friday while diplomats seek a compromise, six EU diplomats said. European Commission last week Proposed that – as part of the G7 alliance – the EU should impose a price cap of $100 a barrel on products such as diesel that trade above the price of crude and $45 for products that trade at a discount to crude do business.
But Poland and the three Baltic countries have pushed for a lower cap and the current G7 price range Russian crude oil will be reduced from the current $60 a barrel. Russia’s Ural export blend crude oil has been business Between $46 and $52 a barrel in January. More aggressive EU countries want to cap crude running between $40 and $50 to curb fossil fuel revenue, which funds Vladimir Putin’s war on Ukraine. Diesel is currently trading around $120 to $130 a barrel.
An EU-wide embargo on Russian oil products – from crude oil, such as diesel, gasoline and jet fuel – comes into force this Sunday, February 5, presenting a tough deadline for agreement.
The G7 alliance price cap is due to come into force at the same time so that Western shipping firms and insurance companies can continue to facilitate Russian oil exports sold at or below the cap level. EU sanctions and the G7 cap aim to work in parallel to reduce Russia’s income while shielding global energy markets from a major shock.
There was no progress at a meeting of EU ambassadors on Wednesday, which also discussed a new EU sanctions package on Russia’s ally Belarus. Offensive countries led by Lithuania are also pushing against exemptions within the Belarus sanctions package for fertiliser, three EU diplomats said, to reflect other countries’ concerns about global food security.
The European Commission will now continue discussions behind closed doors, with a view to eventually reaching an agreement at the next meeting of ambassadors on Friday. like last minute disagreement The price cap on Russian crude was in place late last year, with an original offer of $65 to $70 a barrel being slashed to $60 following protests from Poland and the Baltic countries.
“We are confident that an agreement will be reached before February 5,” said an EU diplomat. Meanwhile, a second diplomat said the EU’s big countries were “fed up with the moral blackmail” of the aggressive coalition.
EU sanctions on Russian diesel had raised fears of a supply shortfall, but imports have increased significantly in recent weeks. alleviate those concerns for now.
Some commentators have criticized the proposed limit levels for oil products.
Laurie Myliwirta, principal analyst at the Center for Research on Energy and Clean Air, said the cap was too high to have a significant impact.
“It really represents window dressing by EU countries,” Myllyvirta said. “The aim should be to push Russia’s selling prices far below where the market will set them close to production costs, depriving Russia of additional profits. Instead, the mindset of many countries is to set cap levels high enough to act only as a circuit breaker against price increases.”
Barbara Moens and Leonie Kiejewski contributed reporting.