G7, EU agree oil price cap to reduce Russia war funding

Updated : Dec 05, 2022 13:25
|
AFP

The G7 and EU on Friday agreed a $60-per-barrel price cap on Russian oil in an attempt to deny the Kremlin of war resources, as President Vladimir Putin said more strikes on Ukrainian infrastructure were "inevitable".

The price cap, previously negotiated on a political level between the G7 group of wealthy democracies and the European Union, will come into effect with an EU embargo on Russian crude oil from Monday.

The embargo will prevent shipments of Russian crude by tanker vessel to the EU, which account for two thirds of imports, potentially depriving Russia's war chest of billions of euros.

"The G7 and Australia... reached consensus on a maximum price of 60 US dollars per barrel for seaborne Russian origin crude oil in line with" the European Union, the G7 said in a statement.

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The G7 said it was delivering on its vow "to prevent Russia from profiting from its war of aggression against Ukraine, to support stability in global energy markets and to minimise negative economic spillovers of Russia's war of aggression".

Poland had refused to back the price cap plan over concerns the ceiling was too high, before its ambassador to the bloc confirmed Warsaw's agreement on Friday evening.

The price cap is designed to make it harder to bypass the sanctions by selling beyond the EU.

Poland's ambassador Andrzej Sados also said Brussels would take into account Polish and Baltic state suggestions for a "painful and expensive" ninth round of sanctions against Moscow.

The White House described the deal as "welcome news", saying a price cap will help limit Putin's ability to fund the Kremlin's "war machine".

Oil pricesRussiaEUG7

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