EU USD 60 maximum price offer for Russian oil

According to international media reports, representatives of the 27 EU member countries are continuing negotiations to determine the maximum price to be applied to Russian oil.

The EU Commission has proposed a maximum price of $60 per barrel of oil transported from Russia by sea to reach a consensus among member states.

The proposal was not approved by a group led by Poland, which also includes Baltic states such as Estonia and Lithuania.

UNANIMITY OF 27 COUNTRIES IS NEEDED

While these countries insist on a lower maximum price, a decision with the unanimous consent of all 27 member states is required.

In addition, a new price cap mechanism will be established in addition to the maximum price of $60 for Russian oil.

This mechanism will reassess the maximum price of Russian oil every 2 months.

The mechanism will ensure that the maximum price of Russian oil remains 5 percent below market prices.

The application of the maximum price will enter into force on December 5, when the EU decision to cut Russia’s crude supply by sea will become effective.

MUCH LOWER PRICE WORKING FROM 3 COUNTRIES

Therefore, if Russian oil is not sold below the established price, companies from the G7 countries and the EU will not be able to provide transportation, insurance, reinsurance and brokerage services for this oil.

The G7 countries and the EU were negotiating to impose a maximum price on Russian oil.

The G7 proposed last week to set a maximum price of $65 to $70 a barrel for oil shipped from Russia.

Within the EU, especially Poland, Lithuania and Estonia are working to set maximum prices at much lower levels.

Greece, Malta and the Greek Cypriot Administration of Southern Cyprus (GCA), which play an important role in transporting Russian oil and generate significant revenue, want the price cap to be set at higher levels.

Russia produces about 10 percent of the world’s oil production.

On the other hand, Russian officials announced that they would not sell oil to countries participating in the application of the maximum price. (AA)