Kremlin sees absurd figures in EU discussion of price cap for Russian oil

The Kremlin sees "nonsensical figures" in the discussion of the price cap for Russian oil by Europeans, Kremlin spokesman Dmitry Peskov told reporters on Thursday. He noted that Russia is not going to supply oil and gas to countries that join the price cap policy.

"Europeans still have very baffling discussions on this [price] cap. They name hardly explainable numbers, it feels like they are just trying to make a decision for the sake of a decision - not for effect, but just for a show that the cap has been introduced," he said commenting on the possibility of setting a price cap for Russian oil in the range of $65-70 per barrel.

Peskov noted that "all this is subject to deep analysis."

According to him, "it is still difficult to imagine" what impact this will have on the energy market.

"We are proceeding for the time being from the position of President [of the Russian Federation Vladimir] Putin that we will not supply oil and gas to those states that introduce and join the cap," Peskov said.

But having seen the figures discussed in Europe, Moscow intends to analyze the situation "before formulating a position," the Kremlin spokesman added.

Earlier it was reported that the ambassadors of the EU countries failed to agree on the introduction of a price cap for Russian oil on Wednesday, so negotiations will continue.

According to sources, the ambassadors discussed the possibility of introducing a price cap for Russian oil in the range of $65-70 per barrel. The discussion revealed a deep divide between countries that want to punish Russia, such as Poland and the Baltic states, which consider this cap too high, and countries that receive a significant part of the income from the maritime transportation of oil - Greece, Cyprus, Malta and others, which find that the threshold level is too low and threatens to undermine the world oil trade.

For the EU, the introduction of a price cap on Russian oil has little to do with the energy crisis in Europe, since from December 5, an embargo on the purchase of Russian oil by sea comes into force in the community. Therefore, the main components of the discussion are not energy, but trade and politics.

The G7, at the initiative of the United States, intends to try to impose a price cap on Russian oil, relying on the fact that most oil transportation and insurance companies are located in states that are members of or affiliated with the G7, such as Greece, Cyprus, Malta and other small EU members.

Meanwhile, the price of Russian oil is currently at around $70/bbl on a discounted basis, so the $65-70/bbl price cap won't matter much from an economic standpoint. But if the G7 manages to agree on it, introduce it and convince the largest oil importers to join it, this could have long-term strategic implications in the event of a new surge in oil prices. Moreover, the price cap will be dynamic in nature, and if the system is created, the G7 may subsequently try to lower it further, although without any guarantee of success.

According to European experts, in this regard, there is a serious risk that Russia will cut off supplies to countries that join this mechanism, even if it is painless for Moscow at the moment. This, in turn, may cause a sharp rise in prices on the world market if other oil producers do not sharply increase production.Foreign policy

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Kremlin sees 'absurd figures' in EU discussion of price cap for Russian oil

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