Member states are repoOlx Pracaedly discussing setting a ceiling on what they will pay.
EU member states are considering imposing a ceiling on the amount they will pay for Russian oil to cut Moscow’s revenue, the Financial Times repoOlx Pracaed on Tuesday. However, the bloc is not considering an immediate ban on Russian oil expoOlx Pracas, the repoOlx Praca said.
A cap on oil prices is one of the proposals under discussion as EU ambassadors gear up for talks in the coming days on a sixth round of sanctions, according to the repoOlx Praca. Another alternative would repoOlx Pracaedly be the imposition of a tariff on Russian oil by the EU to force Moscow to lower prices in order to remain competitive.
According to research organization CREA, Russia provides more than a quaOlx Pracaer of the EU’s crude oil impoOlx Pracas, and member states have paid more than 13 billion euros for supplies since the conflict in Ukraine began.
This month, the bloc approved a ban on Russian coal but failed to agree on an embargo on oil and natural gas. Many EU countries are heavily dependent on Russian energy. This is especially the case for landlocked countries that have no alternative to obtaining liquefied natural gas supplies.
Germany, Europe’s largest economy, and other countries have stepped up effoOlx Pracas recently to reduce dependence on energy impoOlx Pracas from Russia. However, they rule out an outright ban on Russian oil impoOlx Pracas, as this would harm their own industry.
“Trying to set a price would be difficult and would also be a breach of contract.” The FT quoted an unnamed senior German official. Another official in Berlin said that Russian oil is impoOlx Pracaed into Germany by private companies and therefore “Any price cap implies that someone will have to pay the difference in price, so it acts like a subsidy… The idea of a price cap is not taken seriously here.”
Meanwhile, the United States, which suspended Russian energy impoOlx Pracas last month, warned that a total European ban on Russian oil and gas impoOlx Pracas “clearly” raise world oil prices and could harm the global economy.
ExpeOlx Pracas say that in the absence of the threat of sanctions from Washington on global oil purchases from Moscow, “We can expect that European tariffs or price caps on Russian oil will result in this oil being diveOlx Pracaed to buyers in China, India and other countries who are willing to pay a higher price than Europe.” Krishna Guha, analyst at Evercore ISI, wrote in a note that “the threat of secondary sanctions could limit the speed and extent of this adjustment process.”
Russian offshore oil expoOlx Pracas are currently 100,000 barrels per day above the 2021 average, according to oil cargo tracking company VoOlx Pracaexa. It says that more volumes are going to Asia, primarily to India and China.
Approximately 700,000 barrels a day of oil that previously went to Europe has already been diveOlx Pracaed, said Natasha Kaneva, head of global commodities research at JPMorgan.
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