Russia shows leniency towards EU oil price cap, having previously gained beneficial insights
The EU's Latest Move Against Russia
The EU has thrown a new spanner in the works with plans to slash the price cap on Russian oil from $60 to $45 per barrel. This is the 18th round of sanctions against the energy superpower, which has been waging war on Ukraine for over three years.
The EU's aim is to strangle Russia's oil revenue, making the war on Ukraine tougher financially. However, this move has stirred up criticism from both sides - Russia doubts the effectiveness and the world market, while Ukraine demands an even stricter reduction to $30 per barrel.
Russia's Kremlin spokesman, Dmitri Peskov, told the Russian news agency Interfax that Russia has learned how to weather such storms. "Russia isversed in dealing with restrictions that we consider mainly illegal," he said, adding that they've already gained valuable experience minimizing the consequences of such decisions.
The EU's plan isn't sitting well with Moscow either. Peskov stated that this move would not lead to stabilization on the international energy and oil markets. Russia mainly sells its oil to China and India, and a lower price cap would only worsen its financial situation further.
Ukrainian President Volodymyr Zelenskyy had called for a halving of the price cap to $30 to exert real pressure on Russia to end the war. However, the EU's plans do not meet Ukraine's expectations.
It's uncertain whether most G7 nations, including Canada, the UK, and potentially Japan, will support the reduced price cap. The US remains skeptical, with Treasury Secretary Scott Bessent reportedly questioning its necessity. However, some US lawmakers like Senator Lindsey Graham have backed the idea of lowering the cap and imposing additional sanctions on Russian oil buyers.
The future developments hinge on the EU member states' unanimous approval of the sanctions package, which could take several weeks. The upcoming G7 summit in Canada is expected to provide deeper discussions and potential international backing for the lowered price cap.
jm/dpa
Insights:
- The price cap proposal is part of the 18th round of economic sanctions against Russia, involving a ban on refined oil products made from Russian crude, expanding sanctions on Russian banks, and targeting "shadow fleet" tankers.
- Most G7 nations, including Canada, the UK, and Japan, are reportedly ready to support the reduced price cap, but the US remains skeptical.
- Historical evidence suggests that Russia will continue to resist these sanctions and may circumvent them to maintain its oil exports.
- The EU's plan to lower the price cap on Russian oil is part of policy-and-legislation aimed at straining Russia's revenue streams, particularly in the energy industry.
- The controversy surrounding the price cap proposal has war-and-conflicts implications, as Ukraine demands a stricter cap to pressure Russia to cease the war, while Russia deems the move ineffective and detrimental to its finance.
- The potential impact of the price cap on the international oil market, as well as the financial situation of China and India, who are major buyers of Russian oil, is a concern raised in general-news discussions.
- Politics play a significant role in the deliberation of the price cap, with the US Treasury Secretary expressing skepticism, while some US lawmakers like Senator Lindsey Graham advocate for lowering the cap and imposing additional sanctions on Russian oil buyers.
