The European Union intends to postpone the imposition of sanctions on Russian oil and temporarily abandon the idea of setting a price ceiling for Russian oil because of the position of two countries – Hungary and Cyprus. This was reported by Bloomberg, citing sources familiar with the negotiations.
To speed up the introduction of a new package of sanctions, discussion of oil issues is likely to be excluded from it, the agency notes. The European Commission should submit a new list of restrictions on October 6 during a summit in Prague. European authorities are trying to impose the toughest possible sanctions against the regime of Vladimir Putin, who recently announced a mobilization, but some politicians fear the economic consequences for their countries.
At the moment, an agreement has been reached in principle on a ban on the import of diamonds and some steel products from Russia, as well as on a ban on the export to Russia of new products of high-tech industries, in particular various electronics, in order to undermine the production of military equipment in Russia. Moreover, the EU believes that restricting the supply of high-tech products is the most effective sanctions that reduce Russia's military potential.
The agency recalls that the United States and the G7 countries counted on the European Union to synchronize the introduction of a ceiling on Russian oil prices with the introduction of a European embargo, which should come into effect from December 5. However, at the moment there is no unity on the oil issue in the EU, in addition to Hungary and Cyprus, some other countries are asking to maintain their benefits (permission to supply oil through the Druzhba pipeline). In addition, Greece and Malta fear for their shipping companies, a significant part of whose revenue comes from the transportation of Russian oil to third countries. Representatives of these European countries want guarantees for their companies in the event of a cap on Russian oil prices.
The prospects for introducing a ceiling on Russian oil prices are still uncertain. In the summer, the US, EU and G7 countries reached an agreement in principle to introduce such a measure. Last week, the EU authorities wanted to speed up the introduction of the mechanism against the background of the mobilization announced in Russia, but they faced internal disagreements. Moreover, the prospects for introducing a price ceiling are doubtful if the major buyers of Russian oil, India and China, refuse to apply this measure. The United States is confident that the introduction of this mechanism in any form will have a negative impact on Russia's oil revenues, since even non-aligned countries will be able to demand even greater discounts on oil supplies from Russia.