EU Halts Russian Oil Price Cap Plan Amid Escalating Middle East Tensions
The European Union has delayed plans to tighten the price cap on Russian oil exports, citing mounting geopolitical volatility following the recent military escalation between Israel and Iran.
The Gaze reports on this with reference to Politico.
The proposed measure, which aimed to lower the cap from $60 to $45 per barrel, was expected to be discussed by EU foreign ministers in Brussels on June 23.
According to EU diplomats, the deepening crisis in the Middle East has triggered fears of a global spike in oil prices.
The $45 cap was included in the European Commission’s 18th package of sanctions against Russia and would have significantly reduced the Kremlin’s oil revenues – funds that continue to bankroll its war against Ukraine and patch up its fiscal deficits.
The latest escalation in the Middle East began on June 13, when Israel and Iran exchanged missile strikes, prompting concerns over a broader regional conflict and its impact on global energy markets.
Crude prices have since surged, pushing them closer to or above existing cap thresholds.
European Commission President Ursula von der Leyen acknowledged that the current $60 price cap had shown limited effectiveness but insisted it still served a stabilizing function in light of recent volatility.
Analysts also caution that any unilateral move by the EU may fall flat without the backing of the United States.
“This cap was designed as part of a buyer’s cartel,” noted Dr. Maria Shagina, a sanctions specialist at the International Institute for Strategic Studies. “Without Washington’s participation, lowering the cap would be largely symbolic.”
Shagina also emphasized the need to strengthen enforcement mechanisms, pointing out that approximately 90% of Russian crude is currently being traded above the existing cap due to loopholes and weak oversight.
As The Gaze reported earlier, President Volodymyr Zelenskyy has urged G7 leaders to adopt even stricter measures, calling for a price cap as low as $30 per barrel.