World

The G7 begins to pressure Russia over Ukraine with an oil price cap


  • Russia says it will not export oil subject to a cap
  • Zelensky says a price cap will do little to deter Russia
  • Ukrainian regions resort to planned power cuts
  • Ukrainian forces hold positions on the front line – Zelensky
  • Russia claims that troops are conducting successful operations in Bakhmut

KYIV, Dec 5 (Reuters) – Group of Seven (G7) price ceiling for Russian offshore oil entered into force on Monday as the West tries to limit Moscow’s ability to finance its war in Ukraine, even though Russia has said it will do not comply with the measure even if it has to reduce production.

The G7 countries and Australia on Friday agreed a $60 per barrel price ceiling for Russian offshore crude after European Union members overcame Poland’s resistance. Russia is the second largest oil exporter in the world.

Ukrainian President Volodymyr Zelensky said the world had shown weakness by setting the ceiling at that level, while Russian Deputy Prime Minister Alexander Novak said on Sunday, it was a crude intervention that went against the rules of free trade.

“We are working on mechanisms to prohibit the use of a price cap tool, regardless of the level that is set, because such an intervention could further destabilize the market,” said Novak, the Russian government official in charge of oil, gas and nuclear energy and coal.

“We will sell oil and oil products only to those countries that will work with us on market terms, even if we have to cut production a bit,” he said.

The G7 agreement allows Russian oil to be transported to third countries using G7 and EU tankers, insurance companies and credit institutions only if the cargo is purchased at or below the $60 per barrel ceiling.

Industry players and a US official said in October that Russia could access to sufficient tankers to ship most of its oil beyond the cap, underscoring the limitations of the most ambitious plan yet to limit Russia’s wartime revenues.

According to Zelensky, the $60 cap will do little to deter Russia from waging war in Ukraine. “You wouldn’t call it a serious decision to put such a limit on Russian prices, which is quite convenient for the budget of a terrorist state.

The United States and its allies have imposed sweeping sanctions on Russia since it invaded Ukraine on February 24 and sent billions of dollars in aid to the Ukrainian government.

French president Emmanuel Macronhowever, drew criticism from Ukraine and its Baltic allies over the weekend for suggestive The West must consider Russia’s need for security guarantees if it agrees to negotiations to end the war.

Zelensky’s aide, Mykhailo Podoliak, said the world needed security guarantees from Russia, not the other way around.

SCHEDULED LAUNCHES

In Ukraine, Russia has been hitting energy infrastructure since early October, causing blackouts and leaving millions without heating as temperatures plummet.

Russia says the attacks do not target civilians and are aimed at reducing Ukraine’s ability to fight.

Ukraine claims the attacks were a a war crime.

Zelensky, in a video address on Sunday, urged citizens to be patient and strong to withstand the harshness of winter.

“To survive this winter, we must be even more resilient and more united than ever before,” he said.

Kyiv Mayor Vitaly Klitschko said on Telegram that outages would be limited from Monday to planned “stabilization” outages to get the network up and running again, but added that the situation remained “difficult.”

Ukraine’s largest electricity supplier, DTEK, said blackouts were planned in three other regions – Odesa, Donetsk and Dnipropetrovsk in southern and eastern Ukraine.

In Kherson, largely without electricity since Russian forces left the southern city last month, the regional governor said 85 percent of customers had electricity.

FIRING ON THE FRONT LINES

On the battlefront, Zelensky said Ukrainian forces were holding positions along the front line, including near Bakhmut, seen as Russia’s next target in its advance through Donetsk.

The Ukrainian military said Russian forces were pushing for improved tactical positions to advance in the direction of Bakhmut and Avdiivka. About 16 settlements, including Bakhmut and Avdiivka, were shelled by tanks, mortars, barrel and rocket artillery, the General Staff of the Armed Forces of Ukraine added.

Russian forces are on the defensive along the Zaporizhia frontline as they hit four settlements in the Donetsk region and six in the Zaporozhye region, the Ukrainian military added.

Russia’s Defense Ministry said its troops were conducting successful operations in the Bakhmut region and had repelled Ukrainian attacks in the direction of Donetsk.

Russian-based officials in occupied Donetsk said Ukraine fired at least 10 Grad missiles at the city. No casualties reported.

In Kryvyi Rih, among the largest cities in southern Ukraine, Russian rockets killed one person and wounded three shortly after midnight, Dnipropetrovsk Oblast Governor Valentin Reznichenko said.

“They targeted an industrial enterprise,” Reznichenko said on the Telegram messaging app, without elaborating.

Reuters could not independently verify reports from the battlefield.

The head of US intelligence said that the fighting in Ukraine was going on “reduced tempo” and that militaries on both sides are scrambling to retool and resupply to prepare for a counteroffensive after winter.

Reporting by Nick Starkov and Reuters bureaus; Writing by Himani Sarkar; Editing by Robert Birsell

Our standards: Thomson Reuters Trust Principles.


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