ShareBRUSSELS: The G7 and EU on Friday agreed a $60-per-barrel price cap on Russian oil in an attempt to deny the Kremlin of war resources, as President Vladimir Putin said more strikes on Ukrainian infrastructure were "inevitable". The price cap, previously negotiated on a political level between the G7 group of wealthy democracies and the European Union, will come into effect with an EU embargo on Russian crude oil from Monday.
The embargo will prevent shipments of Russian crude by tanker vessel to the EU, which account for two thirds of imports, potentially depriving Russia's war chest of billions of euros. "The G7 and Australia... reached consensus on a maximum price of $60 per barrel for seaborne Russian origin crude oil in line with" the European Union, the G7 said in a statement. The G7 said it was delivering on its vow "to prevent Russia from profiting from its war of aggression against Ukraine, to support stability in global energy markets and to minimize negative economic spillovers of Russia's war of aggression".
Poland had refused to back the price cap plan over concerns the ceiling was too high, before its ambassador to the bloc confirmed Warsaw's agreement on Friday evening. The price cap is designed to make it harder to bypass the sanctions by selling beyond the EU.
Poland's ambassador Andrzej Sados also said Brussels would take into account Polish and Baltic state suggestions for a "painful and expensive" ninth round of sanctions against Moscow. The White House described the deal as "welcome news", saying a price cap will help limit Putin's ability to fund the Kremlin's "war machine".
Infrastructure strikes 'inevitable'
After suffering humiliating defeats during what has become the largest armed conflict in Europe since World War II, Russia began targeting Ukrainian energy infrastructure in October, causing sweeping blackouts. Putin said Russian strikes on Ukrainian infrastructure were "inevitable", in his first conversation with German Chancellor Olaf Scholz since mid-September.
Meanwhile, Russia on Saturday rejected a $60 price cap on its oil agreed by the EU, G7 and Australia, which Ukraine said would contribute to the destruction of Russia's economy. "We will not accept this price cap," Kremlin spokesman Dmitry Peskov told domestic news agencies, adding that Russia, the world's second largest crude exporter, was "analyzing" the move. The embargo will prevent seaborne shipments of Russian crude to the European Union, which account for two thirds of the bloc's oil imports, potentially depriving Russia's war chest of billions of euros.
Ukraine on Saturday welcomed a $60 price cap on Russian oil agreed by the EU, G7 and Australia, saying it would "destroy" Russia's economy. The price cap, previously negotiated on a political level between the G7 group of wealthy democracies and the European Union, will come into effect with an EU embargo on Russian crude oil from Monday.
"We always achieve our goal and Russia's economy will be destroyed, and it will pay and be responsible for all its crimes," Ukraine's presidential chief of staff Andriy Yermak said on Saturday on Telegram. But a cap of "$30 would have destroyed it more quickly", he added.
The G7 said it was delivering on its vow "to prevent Russia from profiting from its war of aggression against Ukraine, to support stability in global energy markets and to minimize negative economic spillovers of Russia's war of aggression".
Limit funds for the 'war machine'
The G7 said it was delivering on its vow "to prevent Russia from profiting from its war of aggression against Ukraine, to support stability in global energy markets and to minimize negative economic spillovers of Russia's war of aggression". The White House described the cap as "welcome news" that would help limit Putin's ability to fund the Kremlin's "war machine". Russia has threatened not to deliver to countries that adopted the measure.
The G7 and Australia said they were prepared to adjust the price ceiling if necessary. Russia has earned 67 billion euros ($71 billion) from the sale of oil to the European Union since the start of the war in February. Its annual military budget amounts to around 60 billion, noted Phuc-Vinh Nguyen, an energy expert at the Institut Jacques-Delors in Paris. The EU embargo on seaborne deliveries follows a decision by Germany and Poland to stop taking Russian oil via pipeline by the end of 2022. In all, more than 90 percent of Russian deliveries to the European Union will be affected, according to the bloc.
'Endure' power cuts
After suffering humiliating defeats during what has become the largest armed conflict in Europe since World War II, Russia began targeting Ukrainian energy infrastructure in October. The strikes have caused sweeping blackouts, and cut off water supplies and heating to civilians at a time when the temperature in some regions has dropped to minus five degrees Celsius (41 degrees Farenheit). The authorities have introduced scheduled power cuts several times a day to keep essential infrastructure working.
Talks off the table
The Kremlin also indicated Moscow was in no mood for talks, after US President Joe Biden said he would be willing to sit down with Putin if the latter truly wanted to end the fighting. "What did President Biden say in fact? He said that negotiations are possible only after Putin leaves Ukraine," Peskov told reporters, adding Moscow was "certainly" not ready to accept those conditions. The White House on Friday downplayed the idea too, saying Biden currently has "no intention" of holding talks with Putin. Top US general Mark Milley last month said more than 100,000 Russian military personnel have been killed or wounded in Ukraine, with Kyiv's forces likely suffering similar casualties. - AFP
