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Business News/ News / World/  Russia rejects West's $60 per barrel oil price cap

Russia has rejected a $60 per barrel price cap on its seaborne crude oil decided by the European Union, the Group of Seven (G7) nations, and Australia a few days ago.

According to TASS Russian News Agency, Kremlin Spokesman Dmitry Peskov said, "We are assessing the situation. Certain preparations for such a cap were made. We won't accept the price cap and we will inform you how the work will be organised once the assessment is over."

On Friday, the EU reached a deal Friday for a $60-per-barrel price cap on Russian oil, a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine.

Europe needed to set the discounted price that other nations will pay by Monday when an EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies take effect.

Thereafter, G7 nations and Australia also agreed to adopt a $60 per barrel price cap on Russian oil.

Western governments have agreed to cap the price of Russia.s oil exports in an attempt to limit the fossil fuel earnings that support Moscow's budget, its military, and the invasion of Ukraine.

The cap is set to take effect Monday, the same day the European Union will impose a boycott on most Russian oil — its crude that is shipped by sea.

However, Ukrainian President Volodymyr Zelensky has said that the price cap on Russian oil is not "serious" because it is "quite comfortable" for Moscow.

"Russia has already caused huge losses to all countries of the world by deliberately destabilizing the energy market," he argued, describing the decision on the price cap as "a weak position".

It is "only a matter of time when stronger tools will have to be used anyway", Zelensky added. "It is a pity that this time will be lost".

Zelensky complained the world had shown weakness by setting the cap at $60, which he said would swell Russia's budget by $100 billion a year.

"This money will ... go towards further destabilisation of precisely those countries that are now trying to avoid serious decisions," he said.

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Updated: 04 Dec 2022, 06:20 AM IST
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