EU member states want to achieve a price cap on Russian oil within a few weeks.
The push gained momentum after Russian President Putin announced a “partial mobilization” of troops in response to Russia’s escalating war in Ukraine, and is likely to be included in a new sanctions package to be proposed by the European Commission, sources said. The cap would align the EU with US efforts to keep crude oil prices from soaring and hit Moscow’s revenues.
As interlocutors of the agency noted, despite new efforts by the European Commission and some member states, the plan faces many obstacles and a positive result is not self-evident. It is noted that decisions on sanctions require unanimity and are particularly difficult in this situation, since each EU member has its own energy needs.
Representatives of EU member states will meet with the European Commission at the weekend to discuss the new sanctions, which, in addition to restricting oil supplies, could include additional restrictive measures against individuals and sectors such as technology and luxury goods.
According to the interlocutors, many details have yet to be agreed, in particular, at what price to set the limit. It also remains unclear how such a limit will be applied alongside the EU embargo on Russian oil and the ban on services necessary for its delivery, agreed earlier this year. In any case, there is a degree of urgency, as the price ceiling must be agreed before the EU measures come into force on 5 December.
Representatives of national governments in Brussels will seek to reach a preliminary agreement on capping prices before an informal meeting of EU leaders in Prague on October 6. But one of the biggest question marks will be Hungary.
It remains unclear how effective the price-cap regime will be, especially since some of the biggest buyers of Russian oil, including China and India, have not agreed to join it. U.S. officials say the price cap could work even if many buyers don’t formally join the coalition because they can still use the system as leverage in negotiations with Moscow.
According to Bloomberg, the adoption of the restriction will require member states to set aside their national interests in favor of European solidarity. EU countries that have been granted exemptions for oil coming through their pipelines will want to ensure they are preserved, while countries that import oil by sea may try to link the price cap to the current total embargo on seaborne shipments to level the playing field. .
“Countries such as Greece, Cyprus and Malta may try to protect their industry from these measures,” the Bloomberg interlocutor added.