BRUSSELS: Attempts by the EU and G7 to impose a price cap on Russian oil have largely failed, the European edition of Politico stated. Th...
BRUSSELS: Attempts by the EU and G7 to impose a price cap on Russian oil have largely failed, the European edition of Politico stated.
The newspaper notes, that Russian oil at a price exceeding the ceiling of $60 per barrel is freely transported even by European traders, who should have been the first to comply with the restrictions.
"Around 48% of Russian oil cargoes were carried on tankers owned or insured in G7 and EU countries, the researchers found; in theory, the price cap should apply to these vessels, which comprise the vast majority of the global fleet but in practice, few operators have been targeted," the newspaper wrote.
The newspaper blames the failure on " widespread circumvention [of restrictions], gaping loopholes [in bans] and the ongoing fuel business with Moscow."
According to the publication, the oil price cap dealt the first blow not to Russia, but to the monopoly capabilities of the West in providing financial services to oil carriers and traders.
The newspaper notes that EU countries intend to try to tighten the standards for implementing these restrictions in the 12th package of sanctions, which is currently being discussed. However, according to Janis Kluge, a senior associate at the German Institute for International and Security Affairs, the EU should "adjust its expectations of sanctions."
"At current prices, and even if Russia earns these $60 in the price cap … this will not affect revenue enough to force any change of strategy or to limit Russia's resources enough to make a difference on the battlefield," he said as quoted by the newspaper.
On oil price cap
On December 5, 2022, an embargo on maritime Russian oil shipments to the European Union came into force. G7 nations, the EU and Australia agreed on a price cap for Russian oil delivered by sea, setting the ceiling at $60 a barrel. Moreover, starting February 5, 2023, similar restrictions on deliveries of petroleum products from Russia were enforced as the EU Council officially greenlighted the decision, in conjunction with the G7, to introduce a price ceiling on Russian petroleum products supplied by sea at $100 for premium oil and at $45 for discount.
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