EU sources: Poland blocked EC proposal for price cap on Russian oil

Poland has blocked a European Commission proposal for a price cap on Russian oil at $65 per barrel, EU diplomatic sources in Brussels told PAP. “If we are to hit the Russians in the pocket it has to be realistic,” says an EU diplomat, noting that the proposed amount should be lower. Talks on the issue are to continue in Brussels.

PAP reports that the proposal was blocked at the ambassadors’ meeting by Poland’s Permanent Representative to the EU Andrzej Sadosia.

– Market prices are currently below the proposed price ceiling of $65 per barrel. In such a situation, it makes no sense to introduce an exemption for oil transport above the market price. This would be a promotion of Russian oil,” the EU diplomat said.

Poland, he added, wants a limit set well below the market price.

– If we are to hit the Russians in the pocket it has to be realistic. The idea is to reduce Russian revenues, not to keep them at the same level, he pointed out.

The G7, including the United States and the European Union, are to introduce a price cap on Russian oil exports by sea on 5 December.

The move is meant to be part of sanctions aimed at reducing Moscow’s oil export revenues so that it has less money to fund the invasion of Ukraine.

The idea behind the price cap is to ban shipping, insurance and reinsurance companies from handling shipments of Russian oil around the world unless it is sold for no more than the maximum price set by the G7 and allies, Reuters explains.

On Thursday, representatives of 27 countries discussed in Brussels a proposal to set a price ceiling in the range of $65-70 per barrel.

The cost of producing a barrel in Russia is around $20

Source: PortalMorski.pl