The US and its allies are seeking to agree on a level for a price cap on Russian oil, with officials discussing setting it at around $60 a barrel as the group rushes to put the plan into place before December 5, sources familiar with the talks said.
The price cap, which could still be set as high as $70, is at the centre of the West’s efforts to sanction Russia for its invasion of Ukraine. The untested sanctions design is set to begin on December 5 after facing delays this fall, as the Group of Seven (G7) advanced democracies has struggled to iron out the final details of the complicated plan, The Wall Street Journal reported yesterday.
Ambassadors from the 27 European Union member states are scheduled to meet today, when they will try to come to an agreement on a price. The bloc must agree on the price cap unanimously and diplomats warned that may prove difficult. The G7 is aiming to approve the cap in sync with the EU.
The aim of the plan, which was pushed hard by Treasury Secretary Janet Yellen, is to crimp Russian energy exports revenue while avoiding a surge in oil prices when a European embargo on Russian oil imports kicks in early next month. Despite European reluctance at the time, the G7 first agreed on setting the oil price cap in June following Russia’s February 24 invasion of Ukraine.
Under the sanctions, the G7, EU and Australia will all ban the provision of maritime services for shipments of Russian oil unless the oil is sold below the set cap. The Western countries are hoping to take advantage of their control of much of the world’s maritime insurance, financing and shipping services to dictate the terms of Russia’s oil sales.
Meanwhile, President Volodymyr Zelenskiy appealed to Ukrainians to conserve energy amid relentless Russian strikes that have halved the country’s power capacity, as the United Nations health body warned of a humanitarian disaster in Ukraine this winter.
Authorities said millions of Ukrainians, including in the capital Kyiv, could face power cuts at least until the end of March due to the missile attacks, which Ukraine’s national grid operator Ukrenergo said had wreaked “colossal” damage.
Temperatures have been unseasonably mild in Ukraine this autumn, but are starting to dip below zero and are expected to drop to -20 Celsius (-4 Fahrenheit) or even lower in some areas during the winter months.
Russia’s attacks on Ukrainian energy facilities follow a series of battlefield setbacks that have included a pullout of Russian forces from the southern city of Kherson to the east bank of the mighty Dnipro River that bisects the country.
“Saving electricity remains critically important,” Prime Minister Denys Shmyhal said on Telegram yesterday.
Planned power shutdowns are happening in all regions, and emergency shutdowns are possible in some situations as frosts have started and electricity consumption is rising, he said.