Europe's plan to cap the price of Russian oil hits a wall as Poland reportedly insists on $30 a barrel




EU countries remain split over plans to cap the price of Russian oil.Getty Images
EU countries remain split over plans to cap the price of Russian oil.Getty Images  
  • Europe's plan to cap the price of Russian seaborne crude has stalled just days before its due date.

  • "Uncompromising" Poland is insisting on a cap of $30 a barrel, Reuters reported, citing a diplomat.

  • No new date for talks has been set, despite the fast-approaching deadline of December 5.

The European Union's plan to cap the price of Russian seaborne crude oil has stalled just days before the measure is due to come in, thanks to Poland and other countries digging in their heels on the proposed level.

The EU countries were expected to announce their price cap measure last week, but have had to postpone this as there's a big split about which level would cause Russia the most financial pain while keeping damage to Europe in check.

"There is no deal. The legal texts have now been agreed, but Poland still can't agree to the price," a diplomat told Reuters, according to its report Monday.

The EU has discussed a cap of $65-$70 a barrel on Russian oil, but Poland - along with Lithuania and Estonia - has insisted that was too high. The three countries have pushed for a level of $30 a barrel so that Russia wouldn't earn a profit.

"The Poles are completely uncompromising on the price, without suggesting an acceptable alternative," an EU diplomat said, per Reuters. "Clearly there is growing annoyance with the Polish position."

The countries haven't set a new date for talks, per Reuters, despite the fast-approaching deadline for the measure on December 5. That's when the EU's embargo on seaborne crude imports is set to come in.

A price cap on Russian oil was initially proposed by the G7 nations to curb Moscow's revenue from the sales, to minimize its ability to fund its war against Ukraine. It would be enforced by banning shippers and insurers from handling Russian crude deliveries unless their sold below the price cap.

That approach would provide a loophole in the EU's coming embargo on seaborne Russian crude, by keeping supplies flowing on the global market while diminishing export revenues for Moscow.

Recently, Russia's flagship crude oil - Urals grade crude - was trading 20% below the $65-$70 level, but above the $30 level.

Meanwhile, Energy Aspects' Amrita Sen said the EU won't buy Russian oil regardless of the price cap as the continent's ban on Russian oil supersedes the cap measure.

Brent crude, the international benchmark rose 2.59% to trade at $86.05 a barrel on Monday. West Texas Intermediate crude gained 2.37% to $79.07 per barrel.

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