EU to postpone lowering price cap on Russian oil due to war in Middle East – Politico
Photo: EU to postpone lowering the price cap on Russian oil due to the war in the Middle East (Getty Images)
The European Union will postpone plans to set a new price cap on Russian oil. The decision is linked to concerns that a new conflict in the Middle East could lead to a rise in oil prices, Politico informs.
According to the outlet, a proposal to lower the maximum price of Russian oil from $60 to $45 per barrel was scheduled to be discussed on Monday in Brussels by the foreign ministers of EU member states.
However, two diplomats said that the escalating conflict between Israel and Iran means the plan is no longer feasible.
"The idea of lowering the price cap is probably not going to fly because of the international situation in the Middle East and the volatility. At the G7 meeting this week, it was agreed by all the countries they would prefer not to take the decision right now. The prices were quite close to the cap; but now the prices are going up and down, the situation is too volatile for the moment," a source told Politico.
It is noted that the proposed $45 per barrel cap would result in billions of dollars in lost oil revenue for Russia, which is struggling to maintain high military spending and cover gaps in its state budget.
Price cap on Russian oil
The current price cap on Russian oil is set at $60 per barrel.
Last week, the European Commission presented a new package of sanctions against Russia, which includes a proposal to lower the price cap to $45 per barrel.
Recently, Bloomberg, citing sources, reported that the United States opposes introducing a new price cap on Russian oil. However, hope is not completely lost, as the final decision depends on President Donald Trump.
