Europe 1 with AFP 1:42 p.m., February 04, 2023
The G7, the EU and Australia have reached an agreement on the price cap of Russian petroleum products, two days before the start of a European embargo on these products.
It must be implemented from Sunday, specifies the text signed by the EU, Germany, Australia, the United Kingdom, Canada, France, Italy, Japan and the United States .
The G7 powers and Australia on Friday, following an EU agreement earlier in the day, reached an agreement on a price cap on Russian petroleum products, two days before the start of a European embargo on these products.
In a joint press release, the partner countries announced that they had reached an agreement “on a price ceiling for Russian petroleum products transported by ship”.
It must be implemented from Sunday "or very soon after", specifies the text signed by the EU, Germany, Australia, the United Kingdom, Canada, France, Italy , Japan and the United States.
This price cap must "prevent Russia from profiting" from the war in Ukraine and "support stability in world energy markets", they further note.
The agreement was made possible by the consensus reached earlier in the day by the 27 countries of the European Union and announced on Twitter by Swedish officials on behalf of their country which holds the rotating presidency of the Union.
According to them, it is an “important agreement which is part of the continued response of the European Union and its partners to the Russian war of aggression against Ukraine”.
The agreement should make it possible to limit "the financing of the illegal war" of Russia in Ukraine, welcomed for her part the American Secretary of the Treasury Janet Yellen in a press release.
The agreement includes a ceiling price of 100 dollars per barrel for more expensive products like diesel and another of 45 euros per barrel for less refined products like fuel oil.
This agreement corresponds to the proposals made by the European Commission.
The ceilings set relate to Russian petroleum products transported by ships from partner countries.
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Diplomatic sources described these prices as “balanced”, making it possible to “reduce Russian income while guaranteeing access to third countries” non-EU members to these products.
"With the G7, we are setting price caps on these products, to reduce Russian incomes while ensuring the stability of the global energy market," said European Commission President Ursula von der Leyen.
"We must continue to deprive Russia of the means to wage war on Ukraine," she also said, recalling the entry into force on Sunday of the embargo on Russian petroleum products exported by sea.
According to other diplomatic sources, Poland and the Baltic States were demanding an even lower level of the ceiling to further penalize Moscow.
The equation is delicate, however, the objective being - as with the cap on crude oil adopted in December - to restrict Russia's income while ensuring that it continues to supply the world market so as not to destabilize exchanges and cause a surge in prices.
The diversity of the petroleum products concerned, whose selling price varies enormously from one market to another, also complicates the situation.
The European embargo on Russian refined products "will further unbalance international energy markets", Russian presidential spokesman Dmitry Peskov warned on Friday, assuring that Moscow "was taking measures to cover (its) interests ".
According to an agreement reached in December by the EU, the G7 powers and Australia, these cap levels must be adopted before the entry into force on Sunday of the European embargo on Russian refined products exported by sea, to to prevent Moscow easily finding new buyers elsewhere at market prices.
Beyond the fixed ceiling, it will be prohibited for companies based in the EU, the G7 or Australia to provide the services allowing maritime transport, in particular insurance (the G7 countries responsible for some 90% of the world's cargoes ).
Following in the footsteps of the United States and Canada, the EU has already banned since December 5 on its soil almost all deliveries of Russian oil transported by sea.
To this was added simultaneously a price cap mechanism approved by the EU, the G7 and Australia, providing that, worldwide, only Russian crude sold at a maximum of 60 dollars per barrel can continue to be delivered.
Beyond that, companies based in these countries can no longer provide their services (trading, freight, insurance, shipowners, etc.) under penalty of sanctions.