The European Commission has asked representatives of EU member states to approve a price ceiling for Russian oil at $60 per barrel. This is reported by The Wall Street Journal, citing diplomatic sources. The European Commission considers this level acceptable in order to reduce Moscow's income from oil supplies, and a broad coalition of countries has formed around this level, the newspaper notes.
The EU executive believes that all 27 EU members could agree on a ceiling at this level as early as Thursday, but sources admit that the final level could still be revised during negotiations on 1 December. The publication also recalls that the position of the EU will need to be coordinated with other members of the Western coalition who are promoting the idea of introducing a ceiling on oil prices – we are talking about the G7 countries, as well as Australia.
In the absence of agreement between the EU countries, the previous version of the sanctions will come into force – a full-fledged embargo on Russian oil, as well as on the provision of insurance, brokerage, financial, logistics and other services for Russian oil companies. EU sanctions have previously caused concern in the United States, the US administration was worried that European restrictions on the provision of insurance and financial services could lead to a sharp reduction in the supply of oil on the market.
Previously, the Baltic countries actively opposed the $60 level, which insisted on the lowest possible ceiling level, in particular, Poland insisted on $30 per barrel – the price as close as possible to the profitability of oil production in Russia. However, this position did not find understanding among countries whose economies are heavily dependent on maritime transport – Greece, Cyprus and Malta. These countries urged to stop at the level of $65 in order to continue transporting Russian oil to third countries.
Russian oil prices are not doing very well without sanctions. According to the latest data from the Russian Ministry of Finance, the average monthly price of Urals oil in November fell by 5.9% to $66.47 per barrel, and in annual terms, the fall was 16.6%. At the same time, directly in ports and shipping terminals, according to the Argus agency, on whose data the Ministry of Finance also relies, the price of oil dropped to $52 per barrel, that is, even below the ceiling that the EU countries plan to approve.