Negotiations on the maximum price for Russian oil within the framework of the global mechanism, which Western countries intend to adopt, have reached an impasse. European countries have come up against several tough negotiating positions from Poland, Hungary, Greece and Malta and so far cannot find a consensus. Bloomberg and Politico write about the details of the negotiations.
The European Commission offers a compromise option of $65 per barrel of Russian oil, but this option does not suit the Baltic countries, led by Poland. This bloc insists that such a price level is too "generous in relation to Moscow." Other opinions are shared by countries in which the shipping business is well developed – we are talking primarily about Greece and Malta. These countries insist on the upper limit of the discussed ceiling of $70 per barrel: the higher the limit, the more opportunities for local businesses to earn on Russian oil supplies.
“We are looking for ways how this can work and how we can find a common basis so that the mechanism can be implemented in an ideally pragmatic and efficient way, while at the same time avoiding the fact that this could lead to undue inconvenience for EU countries,” Bloomberg reports. words of German Chancellor Olaf Scholz.
The German leader also expressed confidence that a consensus would be found in the near future. However, according to the results of negotiations on Wednesday, it was not possible to find him. Discussions are expected to continue on Thursday 24 November. The agency notes that the presented ceiling of $65-70 per barrel will not have a significant impact on Moscow's revenues in any case, since the price is well above the level of production costs.
According to Politico, Hungarian diplomats have once again stated that they oppose any restrictions, however, apparently, they will not block the EU decision, since Hungary has already beaten out concessions on pipeline oil, which it receives from Russia via the pipeline "Friendship". Poland's too tough stance, sources say, is somewhat annoying to other European diplomats, as now only one country is blocking the gigantic agreement that has been in the making for such a long time. Moreover, Poland insists on synchronizing oil sanctions with the 9th package of sanctions against Russia, which can only delay the process.
On Wednesday, November 23, it became known that a coalition of Western countries led by the United States agreed on almost all the critical points of the agreement, which will introduce a mechanism for limiting prices for Russian oil. The system introduces a ban on the provision of any services related to the sea transportation of Russian oil if the price of oil in the tanker exceeds the ceiling price, which is still being negotiated. The main buyers of Russian oil – China, India and Turkey – refused to join the mechanism, but the sanctions will allow them to strengthen their negotiating position with Russia and demand a higher discount.
Traders and market analysts say that setting a price ceiling in the range of $65-70 per barrel is unlikely to fundamentally affect oil trade, because Russian grades of oil are traded at a discount to the benchmark Brent grade in the range of $60-70 per barrel. Nevertheless, the Russian side still does not intend to supply oil to those countries that will join the Western price capping mechanism.
