Russia rejects $60 oil price cap, warns countries supporting it
Ukraine’s presidency said the $60 price cap ‘will destroy’ Russia’s economy
KYIV: Russian authorities rejected a price cap on the country’s oil set by Ukraine’s Western supporters and threatened on Saturday to stop supplying the nations that endorsed it.
Australia, Britain, Canada, Japan, the US and the 27-nation European Union agreed on Friday to cap what they would pay for Russian oil at $60-per-barrel. The limit is set to take effect on Monday, along with an EU embargo on Russian oil shipped by sea. Kremlin spokesman Dmitry Peskov said Russia needed to analyse the situation before deciding on a specific response but that it would not accept the price ceiling.
Russia’s permanent representative to international organisations in Vienna, Mikhail Ulyanov, warned that the cap’s European backers would come to rue their decision.
“From this year, Europe will live without Russian oil,” Ulyanov tweeted. “Moscow has already made it clear that it will not supply oil to those countries that support anti-market price caps. Wait, very soon the EU will accuse Russia of using oil as a weapon.”
Ukraine’s presidency on Saturday said a $60 price cap on Russian oil agreed by the EU, G7 and Australia “will destroy” Russia’s economy. “We always achieve our goal and Russia’s
economy will be destroyed, and it will pay and be responsible for all its crimes,” Ukraine’s presidential chief of staff Andriy Yermak said. But a cap of “$30 would have destroyed it more quickly”, he added.
Under Friday’s agreements, insurance companies and other firms needed to ship oil would only be able to deal with Russian crude if the oil is priced at or below the cap. Most insurers are located in the EU and the UK and could be required to observe the ceiling. Russia’s crude has already been selling for around $60 a barrel, a deep discount from international benchmark Brent, which closed on Friday at $85.42 per barrel.