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EU urges China and India to support Russia’s oil price cap


EU energy chief says Russia is using natural gas as a weapon

BALI, Indonesia – The European Union on Saturday called on China and India to join the G-7 initiative to impose a cap on Russian oil prices, arguing that the countries’ overpayments to Moscow amid the crisis. The fact that the Kremlin is at war in Ukraine is not fair.

The G-7 countries announced on Friday that they Agree on Russia’s plan to impose oil prices.

The policy is designed to reduce the profits Russia makes from oil sales and serves as another sanction against the Kremlin for its onslaught in Ukraine.

Details of how the price cap will work are still being finalized, but energy analysts have raised concerns about the plan, particularly whether key consumers such as China and India will participate or not.

China and India have increased their purchases of Russian oil after Moscow’s invasion of Ukraine, benefiting from discounted interest rates.

Asked if the EU would expect China and India to help with the proposed price ceiling, European Energy Commissioner Kadri Simson said: “I think they should.”

Speaking to CNBC on the sidelines of the G-20 energy meeting in Indonesia, Simson said China and India are “ready to buy Russian oil products while defending that this is important for supply security.” But it wouldn’t be fair to pay excess revenues to Russia.”

“So the cap will also give buyers who are not part of our sanctions the opportunity to get oil at a fair price, a price where the element of war is not added,” Simson said. ‘ said Simson.

Last week, the US said it had constructive talks with India on the issue, according to Reuters, while China said in July that price caps were a “very complex issue. “

‘Huge time pressure’

The price cap is expected to be ready before the beginning of December when EU sanctions on Russian crude oil imports by sea come into effect. However, market participants are still waiting for more details on the exact limit level.

“The initial price cap will be set at a level based on a range of technical inputs and will be decided by the alliance as a whole prior to implementation in each jurisdiction. Price caps will be communicated. openly and transparently,” the G-7 said in a joint statement.

The EU’s head of energy policy did not say when final details would be presented but added that technical work was underway. “We’re under huge time pressure,” she said, adding that this often means such steps will happen “sooner rather than later”.

Russia has announced that it will not sell oil to countries that impose price caps. Furthermore, following the announcement of the G-7, Russia’s state-owned energy giant Gazprom said it would not restart flow through the Nord Stream 1 pipeline due to technical problems.

The Nord Stream 1 pipeline, connecting Russia and Germany across the Baltic Sea, will be reopened on Saturday after three technical working days.

'There are alternatives to Russian oil,' OECD head says of US call for Russian oil price cap

European officials have criticized Russia for using gas as a weapon of war, a charge the Kremlin denies.

Meanwhile, some market analysts continue to question whether price caps are effective in reducing Russian oil revenues.

Chris Weafer, managing director at Macro-Advisory, said: “The main impact of the G-7 oil price cap will be a stronger shift of economic competitiveness from Europe to India, Turkey, China, and India. Countries and other Asian countries,” Chris Weafer, chief executive officer of Macro-Advisory, said in an email to clients. .

“Russia will not sell oil to so-called unfriendly Western countries but will continue to sell to Asian countries at a discount to global prices,” he added.



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