Poland blocks EC’s proposal to cap the Russian crude

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Poland has blocked a European Commission proposal to cap the Russian oil price at USD 65 per barrel, PAP quoted EU diplomatic sources in Brussels.

According to information obtained by PAP, the proposal was blocked at the meeting of EU ambassadors by Poland’s Permanent Representative to the EU, Andrzej Sadoś.

“Market prices are below the proposed cap of USD 65 a barrel. In such a situation, it makes no sense to introduce an exemption for oil transport above the market price. It would be a promotion of Russian oil,” said an EU diplomat.

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He added that Poland wants to set the limit well below the market price.

According to Reuters, Poland said it couldn’t go above USD 30 per barrel

“If we are going to hit the Russians in the pocket, it has to be realistic. The point is to reduce Russian revenue, not to keep it at the same level,” the diplomat added.

The G7, including the US, the European Union, and Australia, are set to implement the price cap on sea-borne exports of Russian oil on December 5.

The move is said to be part of sanctions aimed at reducing Moscow’s revenue from oil exports so that it has less money to finance its invasion of Ukraine.

According to Reuters, the idea of the price cap is to prohibit shipping, insurance and reinsurance companies from handling cargos of Russian crude around the globe, unless it is sold for no more than the price set by the G7 and its allies.

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On Thursday, representatives of 27 countries discussed in Brussels a proposal to set a price ceiling in the range of USD 65-70 per barrel.

Russia’s production costs are estimated at around USD 20 per barrel.

Talks on the matter are to be continued in Brussels.

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