- Russia’s Urals crude oil dropped to $51.96 per barrel at Primorsk Baltic Sea port.
- It is 20% lower than the European Union’s proposed price limit of $65 per barrel. However, some countries would prefer it lower.
- The EU member states are expected to resume talks Monday on the Russia oil price cap.
Russia’s top crude oil was even lower than the European Union’s price cap. Some member states still oppose this proposal.
According to Argus Media data, the price of Urals crude oil fell to $51.96 per barrel at Primorsk Baltic sea port. Bloomberg.This is 20% less than the EU’s $65 per barrel price limit.
According to reports, a price limit of $65-$70 was being considered. The talks stalled over weekend. It now appears closer to $65, while Poland, the Baltic States and others are pushing for a lower limit. On Monday, EU member countries will continue to deliberate the issue.
The EU’s December 5th, 2005 embargo against seaborne Russian crude oil imports as well as the ban on related services to deliver worldwide will be coincided with the price cap. This is an attempt to allow the EU to open a loophole that allows Russian oil to flow on the global market, while also limiting Moscow’s export revenue.
A price cap would result in a buyer being penalized if they pay more than the price set. It would also restrict the buyer’s access to European ships.
Russian oil is selling at prices below the proposed price caps, Analysts noted that it wouldn’t be low enough not to affect Moscow’s revenue.
Helima Croft, RBC commodity strategist, said that price caps for oil are not an attempt to decrease Russian revenue but to maintain Russian oil prices.
