EU reaches deal to impose $60 cap on Russian oil exports

EU member states have agreed to impose a $60 cap on international oil purchases after Poland dropped its opposition to a long-debated deal aimed at curbing the Kremlin’s oil revenues.

Warsaw has struck a deal on the cap after it sought a lower house to undermine Moscow’s finances. His support means that the union will have a priority before December 5, when the ban on imports of oil from the Russian sea to the EU will come into effect.

The cap, to be accepted by G7 countries and some allies, is designed to keep Russian oil flowing to countries such as India and China, but with little benefit to Moscow.

It is intended to gain global access because Russian oil importers, who rely on insurance and shipping services from companies in the EU and other G7 countries, would like to see price room.

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However, Russia has said it will not sell oil to any country participating in the cap, and India and China have not said they will implement it. Russia is expected to rely on ready-to-operate ships without Western insurance, although traders have warned that its exports could fall if it cannot get ships enough.

Russian oil is trading at a significant discount to international benchmark Brent.

Andzrej Sadoś, Poland’s permanent representative to the EU, said, “We can agree with this decision, adding that the publication of the law can be done at the end of the week.

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The agreement follows months of negotiations.

The cap is lower than the European Commission’s original proposed price of up to $70, following requests by Poland and other member states to lower it. On Friday, benchmark Brent crude was trading at around $86.

Warsaw gave their support after Brussels insisted on working quickly on a new package of sanctions against Moscow, which would include measures proposed by Poland. “We want to make sure that . . . that we are working on a new, painful, expensive for Russia, a package of sanctions,” said Sadoś.

The cap agreement also includes a provision that the ceiling is regularly reviewed to ensure it is “at least 5” below the market price of Russian oil.

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The price policy of the US has been approved, which is keen to ensure that Russian oil is exported to avoid a global shortage that will lead to higher prices. The US hopes that India and China will still be able to use the existence of tariffs to negotiate large amounts of money.

Some EU states have already requested a price of around $30, but Brussels officials fear that this will see Moscow cut exports.

Oil and gas could account for 42 percent of Russia’s revenue this year, about Rbs11.7tn ($191bn), the country’s finance ministry said.

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