BRUSSELS — European Union ambassadors trying to reach an agreement on a maximum price for Russian oil continued to talk into Thursday evening, despite expectations that a deal was close.
Negotiations on a price cap on Russian oil sales, a policy led by the G7 industrialized nations and other close allies of Ukraine, have been ongoing for more than a week at European Union headquarters.
Negotiators from the 27 EU member states must unanimously agree on the price. Recent discussions have been around a price of $60 a barrel, several diplomats and officials said. That’s lower than what was originally proposed by the G7, a victory for hardline pro-Ukraine nations like Poland, which wanted a lower price to limit Russian oil revenue.
An almost complete embargo on Russian oil goes into effect on December 5 in the European Union. EU insurers and tankers, which make up half of the world’s fleet, will no longer be allowed to offer their services to transport Russian oil. This would not apply to buyers of Russian oil, such as China and India, if they ship and insure cargo with companies from countries outside the cap group.
Fearing a global oil crisis, the United States has supported a price cap policy that would allow European tankers and insurers to continue facilitating the export of Russian oil as long as the oil they transport or insure is sold at or below the cap.
The benefit of this approach, according to its promoters, is that Russia loses some revenue because the cap is lower than what its oil would normally fetch on the market, but has an incentive to keep selling its crude because the price is still high enough to generate a vital income. The cap would also prevent the price of Russian oil from rising above a certain point if global prices rise.
Russian oil, also known as Urals crude, has fluctuated between $60 and $65 a barrel over the past week, trading at a significant discount to other crudes.
Poland and a handful of allies were the last holdouts in the EU talks. They have been pushing for the lowest possible price to limit oil revenues that help finance the war in Ukraine, as well as frequent price revisions and more sanctions against Russia.
By Thursday evening, those points appeared to be secured and EU diplomats began what they hoped would be their final round of talks before a deal is struck. But Poland has asked for an extension, several diplomats and EU officials said.
Wally Adeyemo, the US deputy treasury secretary, said on Thursday he was encouraged by signs that the European Union was rallying around a price. “My view is that we will get this deal done,” Mr Adeyemo said at a Reuters-sponsored event, adding that he was optimistic that Poland would support a deal that its other allies would then ratify.
Polish diplomats expressed optimism that a deal was close, while others complained that the process had already dragged on too long and threatened to make Ukraine’s European allies appear fragmented.
Alan Rapport contributed reporting.
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