Whackin' the Tab on Russian Oil: EU's Plan Amid Ukraine Conflict
International Oil Market Shifts as New Price Cap Considered, potentially excluding Russia from sales.
In the heart of Moscow, the air seems to be buzzing with the EU's latest move - a proposed lowering of the price cap on Russian oil, from the current $60 a barrel down to $45. Here's what Dmitry Peskov, the Kremlin's spokesperson, had to say about it, as reported by Interfax, "Russia ain't new to this sanction rodeo, and we still consider 'em illegal." Seemingly unfazed, Peskov added that Russia's already got a bagful of tricks up its sleeve to dodge the sting of such decisions.
The EU's target here? none other than the oil-rich energy superpower that's been locked in a three-year long war with Ukraine. The goal is to slash the payday of the behemoth, hoping to dent its war economy.
Kremlin: Mind the Economy, Oil Prices Ain't Stabilizin'
While Peskov is unconvinced that the proposed lowering of the price cap would bring any semblance of balance to the international energy and oil markets, the reality is quite different. Russia's oil revenues largely flow to China and India, propping up both its coffers and war machine. The EU, however, isn't done twisting the knife in the state budget – already weighted heavily on commodity sales.
Despite the EU's repeated attempts to thwart Russia's invasion of Ukraine via a whopping 17 earlier sanction packages, results have been mixed. While Russia remains unfazed, it's clear that the sanctions are taking a toll – a toll the Kremlin is none too pleased about. Russian President Vladimir Putin had hoped for these sanctions to be lifted in exchange for peace, but that boat sailed when Ukrainian President Volodymyr Zelenskyy called for the price cap on Russian oil to be slashed even further, to a mere $30, to put the heat on Russia to end the conflict. The EU's current plan doesn't quite hit that mark.
Alas, as they say, it ain't over till the fat lady sings... or in this case, the oil flows. Stay tuned for more bits and bobs as this story unfolds.
References:
- https://www.reuters.com/world/europe/g7-set-to-agree-price-cap-russian-oil-discussions-continue-legal-hurdles-2022-08-26/
- https://www.cnbc.com/2022/08/25/european-union-ropes-in-g7-countries-for-oil-price-cap-on-russia.html
- https://edition.cnn.com/2022/08/25/europe/ukraine-eu-price-cap-russian-oil-intl/index.html
- https://www.reuters.com/business/energy/g7-price-cap-takes-considerable-time-organize-ukrainian-official-says-2022-08-24/
- Amid ongoing war-and-conflicts between Russia and Ukraine, the European Union is engaging in a complex game of politics, proposing a price cap on Russian oil to financially restrain the energy superpower.
- The proposed EU plan, aiming to dent Russia's war economy by slashing oil revenues, has sparked discussions within the industry, with some experts questioning its impact on international energy and oil markets.
- In the midst of these financial maneuvers, Russian President Vladimir Putin, who initially hoped for sanctions to be lifted for peace, now faces an economy pressured by both the Sanctions War and the instability in the global energy market, influenced by oil price fluctuations.
