Washington is reportedly pushing for the ceiling to stay at $60 per barrel
The US has opposed calls by some EU member states to lower the price cap on Russian crude oil in order to reduce Moscow’s revenues, Politico reported on Wednesday, citing sources.
According to the outlet, Poland and the Baltic states have been pressing for a review of the price ceiling, something that was supposed to happen in March. The European Union agreed to review the limit every two months, starting in mid-January, with the aim of keeping the threshold at least 5% below the average market price.
“The US doesn’t want to do it. Estonia, Poland and Lithuania are pushing too far, especially given the reluctance from the US. This is not going to happen,” an EU diplomat told the outlet ahead of a European ambassadors’ meeting on Wednesday, discussing sanctions and oil price caps.
According to media reports, Poland and Lithuania have proposed lowering the price limit from $60 to $51.45 per barrel. However, changing the figure would require unanimity among G7 and EU nations.
Analysts say the move would be unfavorable for the United States, because the mechanism also affects prices for American energy producers.
Western sanctions on Russian seaborne crude took effect last December. They ban tankers that fly the flag of any EU member state from carrying crude originating in Russia, unless it is sold to the buyer at or under an agreed price of $60 per barrel.
A similar embargo, accompanied by price caps, was imposed on Russian refined oil products in February. In response, Moscow banned sales of its crude and petrochemicals to nations supporting the scheme.
Russia also announced plans to voluntarily reduce oil output in March by 500,000 barrels per day, as it halts sales to buyers that comply with the Western-imposed price ceiling.
A number of economists have warned that Western sanctions on Russian crude will further tighten global supplies.
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March 29, 2023 at 08:00PM