Russia rejects European Union’s worth cap on Russian oil

On Friday, December 2, European Union, together with G7, after a lot deliberation agreed to cap the worth of Russian seaborne oil at $60 a barrel. Now, in an anticipated response, Russia has refused to just accept a worth ceiling on Russian oil and has warned of a response. Ukrainian President Volodymyr Zelenskyy has advocated for a fair decrease cap.

On Saturday, Kremlin spokesperson Dmitry Peskov mentioned that Russia won’t settle for the worth cap and can assess the scenario and determine their future plan of action. 

“We are assessing the situation. We will not accept this price ceiling and once the assessment is over, we will inform you how the work will be organised,” Peskov mentioned.

Russia’s everlasting consultant to worldwide organisations in Vienna, Mikhail Ulyanov, warned that EU will find yourself ruing their resolution to impose the worth cap. He tweeted, “Starting from this year Europe will live w/o Russian oil. Moscow has already made it clear that it will NOT supply oil to those countries who support anti-market price cap. Very soon the EU will blame Russia for using oil as a weapon.”

Starting from this 12 months #Europe will dwell w/o Russian oil. #Moscow has already made it clear that it’s going to NOT provide #oil to these nations who assist anti-market worth cap. Very quickly the #EU will blame #Russia for utilizing oil as a weapon.

— Mikhail Ulyanov (@Amb_Ulyanov) December 3, 2022

Earlier, following the European Union capped the worth of Russian oil at $60 per barrel, the president of the European Union, Ursula von der Leyen took to Twitter to say that the oil worth cap will ‘reduce Russia’s revenues considerably.’

“The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia’s revenues significantly. It will help us stabilise global energy prices, benefitting emerging economies around the world,” Leyen tweeted together with a video message.

The EU settlement on an oil worth cap, coordinated with G7 and others, will cut back Russia’s revenues considerably.

It will assist us stabilise world vitality costs, benefitting rising economies world wide. pic.twitter.com/3WmIalIe5y

— Ursula von der Leyen (@vonderleyen) December 2, 2022

In the video message, Leyen mentioned “As you know the EU and other major G7 partners will have a full import ban on Russian seaborne oil as of December 5. But to ensure that emerging and developing countries continue to have access to some Russian crude oil at limited prices and thus, today the EU, the G7, and other global partners have agreed to introduce a global price cap on seaborne oil from Russia.”

Regarding the goals of the oil worth cap, the European Commission president acknowledged that it’s going to first solidify the impact of EU’s sanctions, secondly, it’ll cut back Russia’s revenues, and thirdly, it’ll stabilize world vitality markets by permitting some Russian seaborne oil to be traded, brokered, and transported by EU operators to 3rd nations so long as it’s bought beneath the cap.

Notably, earlier a number of EU member nations like Poland, Latvia, and Lithuania had objected that the proposed $65-$70 per barrel for Russian crude is just too modest and much above the charges at which Russia at the moment sells crude oil.

Russia has been promoting its crude oil to a number of nations at discounted charges since its struggle started with Ukraine. Among the patrons of the discounted Russian crude throughout that point, China and India are the largest patrons buying the crude at a 30-40% low cost. 

Recently, Russia rejected Pakistan’s request to offer crude oil at a 30-40% low cost, saying that it will be unable to supply something at current as all volumes are dedicated.

With the European Union imposing an oil worth cap, it is going to be fascinating to see how Russia retaliates and what impression it’ll have on the worldwide oil market.