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Friday, February 3, 2023
HomeWorldEU embargo on Russian oil and price cap in effect

EU embargo on Russian oil and price cap in effect

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At the same time, a price cap on Russian oil carried by ships is in effect, a measure designed to hurt the country’s energy export revenues. It was set at $60 a barrel.

Imports of Russian oil into the European Union are banned from today — with exceptions — as the embargo agreed in June now comes into effect.

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Part of a package of sanctions to punish Russia for its military invasion of Ukraine, the embargo was already in effect immediately after it was adopted, but an adjustment period was allowed for EU member states to gradually implement the ban.

The exceptions concern Hungary, Slovakia and the Czech Republic, three member states with a high degree of dependence on Russian crude transported by pipeline, both due to their geographical location and their inability to substitute it directly.

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At the same time, a price cap on Russian oil carried by ships is in effect, a measure designed to hurt the country’s energy export revenues. It was set at $60 a barrel.

The price cap is linked to decisions by the G7 to reduce Russia’s income from energy exports to the global market, particularly to countries such as China or India.

Under the measure, if Russian crude is transported or insured or financed or the carriers receive technical support and services from Western companies, it is prohibited to sell above $60 a barrel. This limit will be reviewed every two months, according to an announcement by the European Council, based on the reference values ​​of the International Energy Organization (IEO).

Ukraine called for this limit to go even lower, to reach 30 dollars per barrel. But the West was worried about the possibility of Russia withdrawing the quantities it has from the market, causing shortages and skyrocketing prices internationally.

In February 2023, moreover, a European embargo and price limit on the refined petroleum products that Moscow has on the market comes into force.

RES-EMP

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