Brussels Moves Closer to Tighter Restrictions on Russian Oil
The European Union has taken initial steps toward revising the mechanism for capping Russian oil prices. Discussions are currently underway to lower the existing price cap and introduce an automatic review mechanism aimed at increasing pressure on Russia’s export revenues.
The Gaze reports on this with reference to Bloomberg.
According to the report, the cap should be reduced from the current $60 per barrel and reviewed every three months based on market prices.
One of the obstacles was the stance of maritime nations such as Greece, Malta, and Cyprus. However, they now remain open to the proposal.
“Under the proposed plans, the cap would be set at 15% below market rates based on a 10-week average,” sources said. “Based on this approach, the cap would initially be lowered to about $50 per barrel from the current threshold.”
No final decision has been made yet, as EU sanctions require the unanimous support of all member states.
These proposals are part of the 18th package of sanctions, which is currently being delayed by Slovakia. Bratislava is insisting on concessions regarding the gradual phase-out of Russian gas. Nevertheless, reports suggest that the European Commission is prepared to offer certain guarantees if Slovakia lifts its veto.
Additionally, G7 leaders have failed to secure support from Donald Trump for this step. The willingness to ease quota restrictions waned following a rise in oil prices triggered by U.S. strikes on Iran, but oil futures have since declined.
Other G7 member states continue to support the proposal. The Gaze previously informed that most G7 countries are prepared to lower the price cap on Russian oil, even without U.S. backing.
“Talks between member states are now moving in a positive direction, and discussions with G7 allies are ongoing,” Bloomberg notes.
As The Gaze reported earlier, the European Union temporarily paused tightening restrictions on Russian oil last month due to the escalation of the conflict between Israel and Iran and the resulting geopolitical instability.