Europeans decide to limit the price of Russian oil to 60 dollars per barrel

Until the end, Poland threatened to disrupt the negotiations. It took hours of discussion with its community partners and, above all, friendly but firm pressure from the United States, for this transatlantic country to lift its objections. On Friday, December 2, Warsaw finally agreed, allowing Westerners – the European Union (EU), the G7 and Australia – to finalize the mechanism to cap Russian oil prices that they wanted to put in place. By pledging not to buy Russian oil above $60 a barrel, they want to limit Moscow’s income and prevent it from financing the war against Ukraine as much as possible.

it was time Washington and its G7 allies wanted the mechanism to take effect on December 5, the same time the European Union decided to impose an embargo on Russian oil, which would follow those imposed by the United States, Canada, Japan or Australia and slightly ahead of the United Kingdom. This ceiling is not intended to ease their tax, because they all decided not to buy black gold in Moscow anymore. But they thought it was forbidden Above this ceiling price, European, American, British, Canadian, Japanese and Australian companies provide services for the sea transportation (freight, insurance, etc.) of Russian oil to countries that have not decided to seize it, such as China or India.

Today, the G7 countries provide insurance services for 90% of global cargo – the UK in particular is a major player in this market – while Greece, like Malta or Cyprus, is less dominant in shipping. As soon as these players are no longer able to transport or deliver 60 euros worth of Russian oil, they de facto prevent customers from buying it at a higher price.

A risky bet for the Greek and British economies

By deciding on a price ceiling for Russian oil, the West wants to, in effect, impose it on the rest of the world. and prevent Moscow from compensating for the loss of markets by selling black gold elsewhere. At least that’s their reckoning.

But it is not without risk. “Insurers or carriers may arise elsewhere”, admits the diplomat. This would not only empty the ceiling decided by the G7 and its allies of its content, but also lead to competition that could eventually undermine one of the mainstays of the Greek or British economy. That is why, within the EU, Greece, as well as Cyprus and Malta, have campaigned hard to keep the price of Russian oil as close as possible to the market price.