Kremlin rejects EU oil price cap: ‘Europe will live without Russian oil’

The Kremlin on Saturday rejected a European Union plan to cap Russian oil prices at $60 a barrel as it threatens to starve Moscow’s war chest, warning that “Europe will live without Russian oil.”

“Moscow has already made it clear that it will not supply oil to countries that support anti-market price caps,” Mikhail Ulyanov, Russia’s permanent representative to international organizations in Vienna, tweeted on Saturday.

Friday’s agreement by the EU will set the stage for additional steps by the G7 to target Russia as it continues its deadly war in Ukraine.

EU reaches agreement on $60-per-barrel price cap on Russian oil

World leaders tried to balance a plan that would hit the Kremlin’s top earners while allowing some Russian oil to remain on the market amid rising global fears of energy costs and inflation.

The price cap effectively blocks all Western companies from insuring, financing or shipping Russian oil unless it sells for less than $60 a barrel – a condition that will be felt in Russia given the above $85 a barrel listed under Brent on Saturday. International benchmark for crude oil.

Kremlin spokesman Dmitry Peskov echoed Ulyanov’s comments, telling reporters on Saturday that he was “assessing the situation” and noting that “certain preparations” had already been made in case an oil price cap were established.

Peskov did not detail what precautionary measures the Kremlin has taken but said, “We will inform you how the work will be organized once the assessment is completed,” TASS reported.

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Although every member of the EU had to sign Friday’s agreement, not all nations felt the cap affected Russia sufficiently.

Dmitry Peskov Kremlin spokesman

MOSCOW, RUSSIA – DECEMBER 17: Kremlin spokesman Dmitry Peskov is seen moderating Russian President Vladimir Putin’s annual press conference on December 17, 2020 in Moscow, Russia. (Photo by Sefa Karakan/Anadolu Agency via Getty Images/Getty Images)

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Some nations, such as Poland and the Baltic states, pushed for a stricter cap of $30 a barrel, and Estonian Prime Minister Kaja Kallas pointed out that every dollar removed from the cap amounts to $2 billion less in Russia’s war chest.

Despite some concerns that the cap could drain the oil market and raise prices, US Treasury Secretary Janet Yellen argued that the new limits would help lower oil prices globally.

“The price cap will encourage the flow of discounted Russian oil into global markets and is designed to help protect consumers and businesses from global supply disruptions,” she argued, arguing that it would most help low- and middle-income nations that have “suffered the blow .” “Rising Energy Prices.

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“Whether these countries buy energy inside or outside the cap, the cap will enable them to bargain for a further discount on Russian oil,” she added.

Russian President Vladimir Putin is holding a meeting near Moscow

Russian President Vladimir Putin attends a meeting on economic issues via video conference at his Novo-Ogaryovo residence outside Moscow, Russia, Tuesday, June 7. (Mikhail Metzel, Sputnik, Kremlin Pool Photo via AP/Associated Press)

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Russia’s embassy in the US called her comments “arrogant” and alleged that the move was “dangerous”, claiming that Russia would continue to find buyers for its oil.

“Such measures will inevitably lead to uncertainty and impose higher costs for consumers of raw materials,” the embassy added.

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