Von der Leyen states EU to dismiss new Russian oil rate cap strategy

(MENAFN) The European Union has decided to pause its proposal to reduce the price cap on Russian seaborne oil sales, European Commission President Ursula von der Leyen announced, as reported by Agence France-Presse. This measure was meant to be a key part of the EU’s latest sanctions package against Russia.

Since the escalation of the conflict in Ukraine in 2022, the EU and G7 countries set a price cap and embargo on Russian crude oil and refined products to cut off Moscow’s revenue. The European Commission had suggested lowering the cap from $60 to $45 per barrel.

Von der Leyen stated on the sidelines of the G7 summit in Alberta, Canada, that the current cap “had little effect,” but recent oil price increases have shown that the existing limit is working. “For now, there’s little pressure to lower the oil price cap,” she said.

Global crude prices had fallen below the G7 cap but surged after Israel launched missile strikes against Iran last week. As of Wednesday, Brent crude for August delivery traded at $76.36 per barrel, while West Texas Intermediate for July delivery was $74.82 per barrel.

Last week, the European Commission introduced its 18th sanctions package targeting Russian energy exports, infrastructure, and financial institutions. Besides the proposed oil price cap reduction, the package includes bans on using the sabotaged Nord Stream pipeline, restrictions on refined products made from Russian crude, and sanctions on 77 vessels believed to be part of Russia’s “shadow fleet” circumventing trade limits.

The sanctions still require unanimous approval from all 27 EU member states before they take effect.

Bloomberg reported that opposition to lowering the price cap comes not only from recent price increases but also from resistance in the U.S. The final decision reportedly depends on U.S. President Donald Trump, who left the G7 summit early amid rising Iran-Israel tensions.

Russia has condemned the sanctions as unlawful and ineffective. President Vladimir Putin has stated that lifting sanctions is a prerequisite for resolving the Ukraine conflict.

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